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Item 8. Financial Statements and Supplementary Data

2025-02-28 compared with 2024-02-29 · 408 added, 362 removed, 1128 unchanged (41% of the section changed)

36 unchanged sentences

Purchase Price Allocation

Description of the Matter For the year ended December 31, 2023, the Company completed the acquisition of 771 self-storage properties (“stores”) for a total purchase price of $13.0 billion.

As further discussed in Notes 2 and 5 of the consolidated financial statements, the transactions were accounted for as asset acquisitions, and the purchase price was allocated based on a relative fair value of assets acquired and liabilities assumed, which consisted principally of land and buildings.

Auditing the accounting for the Company’s 2023 acquisitions of stores was subjective because the Company, with the assistance of its external valuation specialist if applicable, had to exercise a high level of management judgment in determining the estimated fair value of acquired land and buildings.

Determining the fair value of acquired land was difficult due to the lack of available directly comparable land market information.

The estimated fair value of the acquired buildings was based upon the estimated replacement cost, which were calculated by estimating the cost of building similar stores in comparable markets and adjusting those costs for the age, quality, and building characteristics associated with the acquired stores.

Determining the fair value of the acquired buildings was challenging due to the judgment utilized by management in determining the significant assumptions utilized in, or the adjustments applied to, the valuation of each building.

Description of the Matter For the year ended December 31, 2024, the Company completed the acquisition of 58 self-storage properties (“stores”) for a total purchase price of $581.0 million.

Auditing the accounting for the Company’s 2024 acquisitions of stores was subjective because the Company had to exercise a high level of judgment in determining the estimated fair value of acquired land and buildings.

The estimated fair value of land was based on comparable market information adjusted for differences in land characteristics.

The estimated fair value of the acquired buildings was based upon the estimated replacement cost, which was calculated by estimating the cost of building similar stores in comparable markets and adjusting those costs for the age, quality, and building characteristics associated with the acquired stores.

Determining the fair value of the acquired land and buildings were challenging due to the judgment utilized by management in determining the significant assumptions utilized in, or the adjustments applied to, the valuation of acquired land and buildings.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over management’s accounting for acquired stores, including controls over the review of significant assumptions underlying the purchase price allocation and accuracy of the underlying data used.

For example, we tested controls over the determination of the fair value of the land and building assets, including the controls over the review of the valuation models and the underlying significant assumptions used to develop such estimates.

For the 2023 store acquisitions described above, our procedures included, but were not limited to, reading the purchase and sale agreements and other closing documents, evaluating whether the Company had appropriately determined the transaction was an asset acquisition or business combination and performing sensitivity analyses.

For certain of these store acquisitions, we also evaluated the methods and significant assumptions used by the Company to determine the fair value of the land and buildings and tested the completeness and accuracy of the underlying data supporting the significant assumptions and estimates.

Additionally, for certain of these asset acquisitions, we involved our valuation specialists to assist in the assessment of the methodology utilized by the Company, in addition to performing corroborative analyses to assess whether the conclusions in the valuation were supported by observable market data.

For the 2024 store acquisitions described above, our procedures included, but were not limited to, reading the purchase and sale agreements and other closing documents and performing sensitivity analyses.

For certain of these store acquisitions, we also evaluated the methods and significant assumptions used by the Company to determine the fair value of the land and buildings, tested the completeness and accuracy of the underlying data supporting the significant assumptions and estimates, performed analytical procedures, and obtained corroborative market data.

Additionally, for certain of these store acquisitions, we involved our valuation specialists to assist in the assessment of the methodology utilized by the Company and to perform corroborative analyses to assess whether the conclusions in the valuation were supported by observable market data.

For example, our valuation specialists used independently identified data sources to evaluate management’s selected comparable land sales and building replacement cost assumptions.

5 unchanged sentences

Consolidated Balance Sheets

(dollars in thousands, except share data)

(amounts in thousands, except share data)

December 31, 2024 December 31, 2023

7 unchanged sentences

Liabilities, Noncontrolling Interests and Equity:

Notes payable, net $ 1,273,549 $ 1,288,555

Secured notes payable, net $ 1,010,541 $ 1,273,549

Unsecured term loans, net 2,192,507 2,650,581

Unsecured senior notes, net 7,756,968 6,410,618

Revolving lines of credit 682,000 945,000

Revolving lines of credit and commercial paper 1,362,000 682,000

Operating lease liabilities 705,845 236,515

14 unchanged sentences

stockholders' equity 13,947,535 14,390,921

Noncontrolling interest represented by Preferred Operating Partnership units, net 222,360 261,502

Noncontrolling interest represented by Preferred Operating Partnership units 76,092 222,360

Noncontrolling interests in Operating Partnership, net and other noncontrolling interests 835,735 800,668

1 unchanged sentence

Total liabilities, noncontrolling interests and equity $ 28,847,926 $ 27,456,262

See accompanying notes

See notes to consolidated financial statements.

Extra Space Storage Inc.

Consolidated Statements of Operations

(dollars in thousands, except share data)

(amounts in thousands, except share data)

For the Year Ended December 31,

11 unchanged sentences

Total expenses 1,855,873 1,390,103 888,017

Gain on real estate transactions — 14,249 140,760

Gain (loss) on real estate assets held for sale and sold, net ( 25,906 ) — 14,249

Impairment of Life Storage trade name ( 51,763 ) — —

Income from operations 1,323,360 1,170,141 1,050,402

4 unchanged sentences

Equity in earnings and dividend income from unconsolidated real estate entities 67,272 54,835 41,428

Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets — — 6,251

Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest 13,730 — —

Income tax expense ( 33,478 ) ( 21,559 ) ( 20,925 )

9 unchanged sentences

Diluted 211,577,680 169,220,882 141,681,388

See accompanying notes

See notes to consolidated financial statements.

Extra Space Storage Inc.

9 unchanged sentences

Comprehensive income attributable to common stockholders $ 850,052 $ 771,835 $ 952,032

See accompanying notes

See notes to consolidated financial statements.

Extra Space Storage Inc.

3 unchanged sentences

Stockholders' Equity

Preferred Operating Partnership Operating Partnership Other Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Noncontrolling Interests and Equity

Shares Par Value

Preferred Operating Partnership Operating Partnership Other Shares Par Value Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Noncontrolling Interests and Equity

Balances at December 31, 2021 $ 259,110 $ 410,053 $ 317 133,922,305 $ 1,339 $ 3,285,948 $ ( 42,546 ) $ ( 128,245 ) $ 3,785,976

Issuance of common stock upon the exercise of options — — — 62,322 — 4,572 — — 4,572

Issuance of common stock in connection with share based compensation — — — 204,349 2 21,386 — — 21,388

Restricted stock grants cancelled — — — ( 12,808 ) — — — — —

Issuance of common stock, net of offering costs — — — 2,185,685 22 273,167 — — 273,189

Redemption of Operating Partnership units for stock — ( 6,373 ) — 165,652 2 6,371 — — —

Redemption of Preferred B Units in the Operating Partnership for stock ( 2,834 ) — — 15,265 1 2,833 — — —

Restricted stock grants canceled — — — ( 10,614 ) — — — — —

Redemption of Operating Partnership units for cash — ( 1,654 ) — — — ( 2,963 ) — — ( 4,617 )

Repayment of receivable with Operating Partnership units pledged as collateral — 411 — — — — — — 411

Redemption of Preferred B Units in the Operating Partnership for cash ( 4,500 ) — — — — — — — ( 4,500 )

Issuance of Operating Partnership units in conjunction with business combinations — 16,000 — — — — — — 16,000

Issuance of Operating Partnership units in conjunction with acquisitions — 125,000 — — — — — — 125,000

Issuance of Preferred D units in the Operating Partnership in conjunction with acquisitions 88,074 — — — — — — — 88,074

Purchase of remaining equity interest in existing consolidated joint venture — — — — — ( 18,141 ) — — ( 18,141 )

Noncontrolling interest in consolidated joint venture — — ( 82 ) — — — — — ( 82 )

Issuance of Preferred D units in the Operating Partnership in conjunction with business combinations 6,000 — — — — — — — 6,000

Issuance of common stock in conjunction with acquisitions — — — 186,766 2 40,961 — — 40,963

Repurchase of common stock, net of offering costs — — — ( 381,786 ) ( 4 ) — — ( 63,004 ) ( 63,008 )

Noncontrolling interest in consolidated joint ventures — — 771 — — — — — 771

Net income (loss) 17,623 42,853 ( 8 ) — — — — 860,688 921,156

9 unchanged sentences

Stockholders' Equity

Preferred Operating Partnership Operating Partnership Other Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Noncontrolling Interests and Equity

Shares Par Value

Balances at December 31, 2022 $ 261,502 $ 556,095 $ 1,080 133,921,020 $ 1,339 $ 3,345,332 $ 48,798 $ ( 135,872 ) $ 4,078,274

Issuance of common stock in connection with share based compensation — — — 149,995 2 26,636 — — 26,638

Restricted stock grants cancelled — — — ( 10,614 ) — — — — —

Taxes paid upon net settlement of share based compensation — — — ( 8,295 ) — ( 7,640 ) — — ( 7,640 )

Restricted stock grants canceled — — — ( 10,084 ) — — — — —

Redemption of Operating Partnership units for stock — ( 225 ) — 2,803 — 225 — — —

Redemption of Operating Partnership units for cash — ( 89 ) — — — ( 19 ) — — ( 108 )

Redemption of Preferred B Units in the Operating Partnership for cash ( 4,500 ) — — — — — — — ( 4,500 )

Issuance of Operating Partnership units in conjunction with business combinations — 16,000 — — — — — — 16,000

Issuance of Operating Partnership units in conjunction with acquisitions — 125,000 — — — — — — 125,000

Issuance of Preferred D units in the Operating Partnership in conjunction with business combinations 6,000 — — — — — — — 6,000

Issuance of common stock in conjunction with acquisitions — — — 186,766 2 40,961 — — 40,963

Repurchase of common stock, net of offering costs — — — ( 381,786 ) ( 4 ) — — ( 63,004 ) ( 63,008 )

Noncontrolling interest in consolidated joint venture — — 771 — — — — — 771

Redemption of Preferred A Units in the Operating Partnership for stock ( 16,339 ) — — 851,698 8 11,015 — — ( 5,316 )

Redemption of Preferred D Units in the Operating Partnership for stock ( 22,265 ) — — 154,307 2 22,263 — — —

Redemption of Preferred D Units in the Operating Partnership for cash ( 377 ) — — — — — — — ( 377 )

Life Storage Merger issuance of common stock and Operating Partnership units — 249,470 — 76,217,359 762 11,352,576 — — 11,602,808

Noncontrolling interest in consolidated joint ventures — — 7,959 — — — — — 7,959

Net income (loss) 9,011 38,369 ( 125 ) — — — — 803,198 850,453

Other comprehensive income 577 4,328 — — — — 91,344 — 96,249

Other comprehensive loss — ( 1,389 ) — — — — ( 31,363 ) — ( 32,752 )

Distributions to Operating Partnership units held by noncontrolling interests ( 9,172 ) ( 50,477 ) — — — — — — ( 59,649 )

7 unchanged sentences

Stockholders' Equity

Preferred Operating Partnership Operating Partnership Other Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Noncontrolling Interests and Equity

Shares Par Value

Balances at December 31, 2023 $ 222,360 $ 791,754 $ 8,914 211,278,803 $ 2,113 $ 14,750,388 $ 17,435 $ ( 379,015 ) $ 15,413,949

Issuance of common stock in connection with share based compensation — — — 149,995 2 26,636 — — 26,638

Taxes paid upon net settlement of share based compensation — — — ( 8,295 ) — ( 7,640 ) — — ( 7,640 )

Restricted stock grants cancelled — — — ( 10,084 ) — — — — —

Issuance of common stock for share based compensation, exercise of options and taxes paid upon net settlement — — — 177,545 2 22,904 — — 22,906

Issuance of common stock, net of offering costs — — — 2,310 — 365 — — 365

Offering costs associated with shelf registration — — — — — ( 522 ) — — ( 522 )

Redemption of Operating Partnership units for stock ( 31,054 ) ( 28,658 ) — 536,852 5 59,707 — — —

Redemption of Operating Partnership units for cash — ( 1,445 ) — — — ( 896 ) — — ( 2,341 )

Redemption of Preferred A Units in the Operating Partnership for stock and cash ( 16,339 ) — — 851,698 8 11,015 — — ( 5,316 )

Redemption of Preferred D Units in the Operating Partnership for stock ( 22,265 ) — — 154,307 2 22,263 — — —

Redemption of Preferred D Units in the Operating Partnership for cash ( 377 ) — — — — — — — ( 377 )

Life Storage Merger issuance of common stock and Operating Partnership units — 249,470 — 76,217,359 762 11,352,576 — — 11,602,808

Redemption of Preferred D Units in the Operating Partnership for loans ( 87,696 ) — — — — — — — ( 87,696 )

Conversion of Preferred D Units in the Operating Partnership for Operating Partnership units ( 27,518 ) 27,518 — — — — — — —

Issuance of Operating Partnership units in conjunction with acquisitions — 100,417 — — — — — — 100,417

Issuance of note receivable to Operating Partnership unit holder — ( 50,000 ) — — — — — — ( 50,000 )

Repayment of receivable with Operating Partnership units pledged as collateral — 1,900 — — — — — — 1,900

Noncontrolling interest in consolidated joint ventures — — 3,078 — — — — — 3,078

Net income (loss) 9,011 38,369 ( 125 ) — — — — 803,198 850,453

Net income 7,262 38,239 50 — — — — 854,681 900,232

Other comprehensive loss — ( 117 ) — — — — ( 4,629 ) — ( 4,746 )

Distributions to Operating Partnership units held by noncontrolling interests ( 9,172 ) ( 50,477 ) — — — — — — ( 59,649 )

Distributions to Operating Partnership units and other noncontrolling interests ( 7,262 ) ( 55,710 ) ( 205 ) — — — — — ( 63,177 )

Dividends paid on common stock at $ 6.48 per share

1 unchanged sentence

Balances at December 31, 2024 $ 76,092 $ 823,898 $ 11,837 211,995,510 $ 2,120 $ 14,831,946 $ 12,806 $ ( 899,337 ) $ 14,859,362

See accompanying notes

See notes to consolidated financial statements.

Extra Space Storage Inc.

9 unchanged sentences

Non-cash interest expense related to amortization of discount on Life Storage unsecured senior notes 43,720 18,786 —

Compensation expense related to share-based awards 26,638 21,386 17,303

Non-cash item - Amortization of Premium Portion of Dec 2024 $300M Bond Add-On ( 197 ) — —

Accrual of interest income added to principal of debt securities and notes receivable ( 31,367 ) ( 37,907 ) ( 38,412 )

Gain on real estate transactions — ( 14,249 ) ( 140,760 )

Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets — — ( 6,251 )

Compensation expense related to share-based awards 22,906 26,638 21,386

(Gain) loss on real estate assets held for sale and sold, net 25,906 — ( 14,249 )

Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest ( 13,730 ) — —

Impairment of Life Storage trade name 51,763 — —

Distributions from unconsolidated real estate ventures 30,745 20,060 13,162

12 unchanged sentences

Return of investment in unconsolidated real estate ventures 15,413 — 342

Issuance and purchase of notes receivable ( 330,499 ) ( 529,245 ) ( 317,482 )

Issuance of notes receivable ( 960,272 ) ( 330,499 ) ( 529,245 )

Proceeds from sale of notes receivable 183,632 167,495 210,048

Principal payments received from notes receivable 140,963 142,192 283,636

Issuance of loan collateralized with OP units ( 50,000 ) — —

Purchase of equipment and fixtures ( 20,514 ) ( 15,994 ) ( 22,832 )

1 unchanged sentence

Cash flows from financing activities:

Proceeds from the sale of common stock, net of offering costs — — 273,189

Proceeds from unsecured term loans and senior notes and revolving lines of credit 8,663,003 5,584,111 5,706,981

Principal payments on unsecured term loans and senior notes and revolving lines of credit ( 7,088,984 ) ( 4,207,700 ) ( 5,500,290 )

Proceeds from unsecured term loans, senior notes, revolving lines of credit and commercial paper 8,685,933 7,113,003 5,188,011

Principal payments on unsecured term loans, senior notes, revolving lines of credit and commercial paper ( 8,724,444 ) ( 7,088,984 ) ( 4,207,700 )

Proceeds from issuance of public bonds, net 1,300,000 1,550,000 396,100

Deferred financing costs ( 23,130 ) ( 39,418 ) ( 9,321 )

Proceeds from principal payments on note receivable collateralized by OP Units — — 411

Net proceeds from exercise of stock options — — 4,572

Proceeds from share issuances 365 — —

Repurchase of common stock — — ( 63,008 )

Redemption of Preferred OP units for cash — ( 5,377 ) ( 4,500 )

Offering costs associated with shelf registration ( 522 ) — —

Redemption of Operating Partnership units for cash ( 2,341 ) ( 108 ) ( 4,617 )

Contributions from noncontrolling interests 29 74 —

Distributions to minority investors ( 70 ) — —

Dividends paid on common stock ( 1,375,003 ) ( 1,046,341 ) ( 805,311 )

Distributions to noncontrolling interests ( 63,177 ) ( 59,719 ) ( 57,793 )

Net cash provided by (used in) financing activities 423,130 431,861 ( 166,711 )

Net increase (decrease) in cash, cash equivalents, and restricted cash 7,348 21,541 ( 51,815 )

Net cash (used in) provided by financing activities ( 202,290 ) 423,130 431,861

Net (decrease) increase in cash, cash equivalents, and restricted cash 38,220 7,348 21,541

Cash, cash equivalents, and restricted cash, beginning of the period 105,083 97,735 76,194

16 unchanged sentences

Noncontrolling interests in Operating Partnership Note Receivable Payoff 1,900 100,000 —

Redemption of Preferred Operating Partnership units for common stock

Preferred Operating Partnership units $ ( 33,604 ) $ — $ ( 2,834 )

Additional paid-in capital 33,604 — 2,834

Redemption of Preferred D Units in the Operating Partnership for loans

Preferred OP units redeemed $ ( 87,696 ) $ — $ —

Note Payable 87,696 — —

Issuance of OP and Preferred OP units in conjunction with business combination

1 unchanged sentence

OP units issued — — ( 16,000 )

Conversion of Preferred OP Units to common OP Units

Preferred OP Units $ 27,518 $ — $ —

Common OP Units ( 27,518 ) — —

Acquisition and establishment of operating lease right of use assets and lease liabilities

17 unchanged sentences

Accounts payable and accrued expenses ( 11,037 ) ( 10,508 ) ( 368 )

Establishment of finance lease assets and lease liabilities

Buyback of bridge loan

Real estate assets, net $ 39,200 $ — $ —

Other liabilities — — ( 67,992 )

See accompanying notes

Bridge loan receivable ( 39,200 ) — —

See notes to consolidated financial statements.

EXTRA SPACE STORAGE INC.

6 unchanged sentences

The Company’s interest in its stores is held through its operating partnership, Extra Space Storage LP (the “Operating Partnership”), which was formed on May 5, 2004.

The Company’s primary assets are general partner and limited partner interests in the Operating Partnership.

The Company’s primary assets are general partner and limited partner interests in the Operating Partnership, which meets the definition of a variable interest entity and is consolidated.

This structure is commonly referred to as an umbrella partnership REIT, or UPREIT.

3 unchanged sentences

These stores are located in 42 states and Washington, D.C.

The Company also offers tenant reinsurance at its owned and managed stores that insures the value of goods in the storage units.

The Company offers tenant reinsurance at its owned and managed stores that insures the value of goods in the storage units and also offers bridge loan financing to certain of its third-party self-storage owners.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

16 unchanged sentences

The assets and credit of the VIE can only be used to satisfy the VIE's own contractual obligations, and the VIE's creditors have no recourse to the general credit of the Company.

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

EXTRA SPACE STORAGE INC.

1 unchanged sentence

Amounts in thousands, except store and share data, unless otherwise stated

Use of Estimates

21 unchanged sentences

The Company did not have any significant assets or liabilities that are re-measured on a recurring basis using significant unobservable inputs as of December 31, 2024 or 2023.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

4 unchanged sentences

In addition, the Company reviews stores in the lease-up stage and compares actual operating results to original projections.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

When the Company determines that an event that may indicate impairment has occurred, the Company compares the carrying value of the related long-lived assets to the undiscounted future net operating cash flows attributable to the assets.

2 unchanged sentences

When real estate assets are identified by management as held for sale, the Company discontinues depreciating the assets and estimates the fair value of the assets, net of selling costs.

The Company compares the carrying value of the related long-lived assets to the undiscounted future net operating cash flows attributable to the assets (categorized within Level 3 of the fair value hierarchy).

The Company compares the carrying value of the related long-lived assets to the discounted future net operating cash flows attributable to the assets (categorized within Level 3 of the fair value hierarchy).

If the estimated fair value, net of selling costs, of the assets that have been identified as held for sale is less than the net carrying value of the assets, the Company would recognize a loss on the assets held for sale.

The operations of assets held for sale or sold during the period are presented as part of normal operations for all periods presented.

The operations of assets held for sale or sold during the period are presented as part of normal operations.

Refer to the Real Estate Assets footnote below for further discussion on the Company's held for sale properties for the year ended December 31, 2024.

The Company assesses annually whether there are any indicators that the value of the Company’s investments in unconsolidated real estate entities may be impaired and when events or circumstances indicate that there may be impairment.

3 unchanged sentences

If the fair value of the reporting unit is determined to exceed the aggregate carrying amount, no impairment charge is recorded.

Otherwise, an impairment charge is recorded to the extent the carrying amount of the goodwill exceeds the amount that would be allocated to goodwill if the reporting unit were acquired for estimated fair value.

Otherwise, an impairment charge is recorded for the amount in which the carrying value of the reporting unit exceeds the fair value.

No impairments of goodwill were recorded for any period presented herein.

1 unchanged sentence

Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, restricted cash, receivables, other financial instruments included in other assets, accounts payable and accrued expenses, variable-rate notes payable, investments in debt securities and notes receivable, revolving lines of credit and other liabilities reflected in the consolidated balance sheets at December 31, 2023 and 2022, approximate fair value.

The fair values of the Company’s notes receivable and notes receivable from Preferred and Common Operating Partnership unit holders were based on the discounted estimated future cash flow of the notes (categorized within Level 3 of the fair value hierarchy);

The carrying values of cash and cash equivalents, restricted cash, receivables, other financial instruments included in other assets, net, accounts payable and accrued expenses, variable-rate notes payable, investments in debt securities and notes receivable, revolving lines of credit and commercial paper and other liabilities reflected in the consolidated balance sheets at December 31, 2024 and 2023, approximate fair value.

Restricted cash is comprised of funds deposited with financial institutions located throughout the United States primarily relating to operating cash reserve for the Company's captive insurance subsidiary and earnest money deposits on potential acquisitions.

The fair values of the Company’s notes receivable from Common Operating Partnership unit holders were based on the discounted estimated future cash flow of the notes (categorized within Level 3 of the fair value hierarchy);

the discount rate used approximated the current market rate for loans with similar maturities and credit quality.

1 unchanged sentence

the discount rates used approximated current market rates for loans, or groups of loans, with similar maturities and credit quality.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

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

8 unchanged sentences

Direct and allowable internal costs associated with the development, construction, renovation, and improvement of real estate assets are capitalized.

Interest, property taxes, and other

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

costs associated with development incurred during the construction period are capitalized.

Interest, property taxes, and other costs associated with development incurred during the construction period are capitalized.

The construction period begins when expenditures for the real estate assets have been made and activities that are necessary to prepare the asset for its intended use are in progress.

3 unchanged sentences

Depreciation is computed using the straight-line method over the estimated useful lives of the buildings and improvements, which are generally between five and 39 years.

The purchase of stores are considered asset acquisitions.

The purchase of stores is considered an asset acquisition.

As such, the purchase price is allocated to the real estate assets acquired based on their relative fair values, which are estimated using significant unobservable inputs.

18 unchanged sentences

Under the equity method, the Company’s investment in real estate ventures is stated at cost and adjusted for the Company’s share of net earnings or losses and reduced by distributions.

Equity in earnings of real estate ventures is generally recognized based on the Company’s ownership interest in the earnings of each of the unconsolidated real estate ventures.

For the purposes of presentation in the statement of cash flows, the Company follows the “nature of distribution” approach for classification of distributions from joint ventures.

Under this approach, cash flows are classified on the basis of the nature of the activity or activities of the investee that generated the distribution as either a return on investment (classified as a cash inflow from operating activities) or a return of investment (classified as a cash inflow from investing activities).

The Company evaluated its investments in preferred stock of non-public real estate entities and determined it did not have significant influence over the entity, and the investment in preferred stock does not have a readily determinable fair value, therefore it has been recorded at the transaction price.

The Company periodically evaluates the investment for impairment.

No impairments were recorded during the year ended December 31, 2023.

Equity in earnings of real estate ventures is generally

EXTRA SPACE STORAGE INC.

1 unchanged sentence

Amounts in thousands, except store and share data, unless otherwise stated

recognized based on the Company’s ownership interest in the earnings of each of the unconsolidated real estate ventures.

For the purposes of presentation in the statement of cash flows, the Company follows the “nature of distribution” approach for classification of distributions from joint ventures.

The Company evaluated its investment in preferred stock of non-public real estate entities and determined it did not have significant influence over the entity, and the investment in preferred stock does not have a readily determinable fair value, therefore it has been recorded at the transaction price.

The Company periodically evaluates the investment for impairment.

No impairments were recorded in our evaluations for any period presented herein.

Investments in Debt Securities and Notes Receivable

17 unchanged sentences

The Company is subject to interest rate risk on its interest-bearing liabilities.

Credit risk is the risk of inability or unwillingness of tenants to make contractually required payments.

Credit risk is the risk of inability or unwillingness of tenants or bridge loan borrowers to make contractually required payments.

Market risk is the risk of declines in the value of stores due to changes in rental rates, interest rates or other market factors affecting the value of stores held by the Company.

The Company has entered into interest rate swap agreements to manage a portion of its interest rate risk.

The Company has entered into interest rate swap agreements and issued variable-rate bridge loans to manage a portion of its interest rate risk.

Redemption of Common Operating Partnership Units

2 unchanged sentences

Redemption of common Operating Partnership units for cash is accounted for by reducing the underlying net book value of the units from noncontrolling interest.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

Revenue and Expense Recognition

7 unchanged sentences

These services are provided in exchange for monthly management fees, which are based on a percentage of revenues collected from stores owned by third parties and unconsolidated joint ventures.

MSAs generally have original terms from three to five years , after which

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

management services are provided on a month-to-month basis unless terminated.

MSAs generally have original terms from three to five years , after which management services are provided on a month-to-month basis unless terminated.

Management fees are due on the last day of each calendar month that management services are provided.

9 unchanged sentences

Each tenant chooses the amount of insurance coverage they want through the tenant reinsurance program.

Tenants can purchase policies in amounts up to 10,000 dollars of insurance coverage in exchange for a monthly fee.

Tenants can purchase policies in amounts up to ten thousand dollars of insurance coverage in exchange for a monthly fee.

As of December 31, 2024, the total number of tenant insurance policies was 1.7 million, which was an aggregate coverage of approximately $ 5.3 billion.

17 unchanged sentences

A Subsidiary REIT is subject to the various REIT qualification requirements and other limitations described herein that are applicable to the Company.

If a Subsidiary REIT were to fail to qualify as a REIT, then (i) that Subsidiary REIT would become subject to U.S.

If a Subsidiary REIT were

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

to fail to qualify as a REIT, then (i) that Subsidiary REIT would become subject to U.S.

federal income tax, (ii) shares in such Subsidiary REIT would cease to be qualifying assets for purposes of the asset tests applicable to REITs, and (iii) it is possible that the Company would fail certain of the asset tests applicable to REITs, in which event the Company would fail to qualify as a REIT unless it could avail itself of certain relief provisions.

4 unchanged sentences

federal corporate income tax and may also be subject to state and local income taxes.

ESM Reinsurance Limited, a wholly-owned subsidiary of ESMI, generates income from insurance premiums that are subject to U.S.

federal corporate income tax and state insurance premiums tax.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

ESM Reinsurance Limited, a wholly-owned subsidiary of ESMI, generates income from insurance premiums that is subject to U.S.

federal corporate income tax and state insurance premiums tax and pays certain insurance royalties to the Company.

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities.

10 unchanged sentences

Diluted earnings per common share measures the performance of the Company over the reporting period while giving effect to all potential common shares that were dilutive and outstanding during the period.

The denominator includes the weighted average number of basic shares and the number of additional common shares that would have been outstanding if the potential common shares that were dilutive had been issued, and is calculated using either the two-class, treasury stock or as if-converted method, whichever is most dilutive.

Potential common shares are securities (such as options, convertible debt, Series A Participating Redeemable Preferred Units (“Series A Units”), Series B Redeemable Preferred Units (“Series B Units”), and Series D Redeemable Preferred Units (“Series D Units”) and together with the Series A Units and Series B Units, the (“Preferred OP Units") and common Operating Partnership units (“OP Units”)) that do not have a current right to participate in earnings of the Company but could do so in the future by virtue of their option, redemption or conversion right.

The denominator includes the weighted average number of basic shares and the number of additional common shares that would have been outstanding if the potential common shares that were dilutive had been issued, and is calculated using the two-class, treasury stock or if-converted method, whichever is most dilutive.

Potential common shares are securities (such as options, Series A Participating Redeemable Preferred Units (“Series A Units”), Series B Redeemable Preferred Units (“Series B Units”), Series D Redeemable Preferred Units (“Series D Units”) and together with the Series A Units and Series B Units, the (“Preferred OP Units") and common Operating Partnership units (“OP Units”)) that do not have a current right to participate in earnings of the Company but could do so in the future by virtue of their option, redemption or conversion right.

For the purposes of computing the diluted impact of the potential exchange of the Preferred OP Units for common shares upon redemption, where the Company has the option to redeem in cash or shares and where the Company has stated the intent and ability to settle the redemption in shares, the Company divided the total liquidation value of the Preferred OP Units by the average share price of $ 156.25 for the year ended December 31, 2024.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

The following table presents the number of weighted OP Units and Preferred OP Units, and the potential common shares, that were excluded from the computation of earnings per share as their effect would have been anti-dilutive:

6 unchanged sentences

9,802,565 9,538,666 1,328,177

For the purposes of computing the diluted impact on earnings per share of the potential exchange of Series A Units for common shares upon redemption, where the Company has the option to redeem in cash or shares and where the Company has stated the positive intent and ability to settle at least $ 101,700 of the instrument in cash (or net settle a portion of the Series A Units against the related outstanding note receivable), only the amount of the instrument in excess of $ 101,700 is considered in the calculation of shares contingently issuable for the purposes of computing diluted earnings per share as allowed by ASC 260-10-45-46.

Accordingly, the number of shares included in the computation for diluted earnings per share related to the Series A Units is equal to the number of Series A Units outstanding, with no additional shares included related to the $ 101,700 fixed amount.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

For the purposes of computing the diluted impact on earnings per share of the potential exchange of Series A Units for common shares upon redemption, where the Company had the option to redeem in cash or shares and where the Company had stated the positive intent and ability to settle at least $ 101,700 of the instrument in cash (or net settle a portion of the Series A Units against the related outstanding note receivable), only the amount of the instrument in excess of $ 101,700 was considered in the calculation of shares contingently issuable for the purposes of computing diluted earnings per share as allowed by ASC 260-10-45-46.

Accordingly, the number of shares included in the computation for diluted earnings per share related to the Series A Units in the relevant periods is equal to the number of Series A Units that were outstanding, with no additional shares included related to the $ 101,700 fixed amount.

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

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Recently Issued Accounting Standards

In March 2020, the FASB issued ASU 2020-04, " Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting " (“ASU 2020-04”).

ASU 2020-04 provides temporary optional guidance that provides transition relief for reference rate reform, including optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions that reference LIBOR or a reference rate that is expected to be discontinued as a result of reference rate reform if certain criteria are met.

ASU 2020-04 is effective upon issuance, and the provisions generally can be applied prospectively as of January 1, 2020 through December 31, 2024.

The Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

The Company also elected to apply additional expedients related to contract modifications, changes in critical terms, and updates to the designated hedged risks as qualifying changes are made to applicable debt and derivative contracts.

Application of these expedients preserves the presentation of derivatives and debt contracts consistent with past presentation.

In December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”) which was issued to defer the sunset date of Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform to December 31, 2024.

ASU 2022-06 is effective immediately for all companies.

ASU 2022-06 had no impact on the Company’s consolidated financial statements for the year ended December 31, 2022.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07 – “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” .

The amended guidance requires the disclosure of incremental segment information, including significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and a reconciliation of segment profit or loss to net income.

The title and position of the CODM must also be disclosed, along with how the CODM uses the reported measures to assess segment

EXTRA SPACE STORAGE INC.

1 unchanged sentence

Amounts in thousands, except store and share data, unless otherwise stated

performance and to allocate resources.

Pursuant to this ASU, the footnotes to the Company's consolidated financial statements include incremental disclosures related to its two reportable segments:

(1) self-storage operations and (2) tenant reinsurance.

The Company has adopted this standard as of December 31, 2024.

Refer to note 17 for further discussion of the Company's reportable segments.

In December 2023, the FASB issued ASU No.

2023-09 – “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” .

The amended guidance focuses on providing more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

Pursuant to this ASU, the footnotes to the Company's consolidated financial statements may include incremental disclosures related to income taxes.

This standard is effective for annual periods beginning after December 15, 2024, therefore, compliance with this ASU will be required beginning with the Company's annual report on Form 10-K for the year ending December 31, 2025, with early adoption permitted.

The Company expects to adopt this ASU for its annual report on Form 10-K for the year ending December 31, 2025, and is continuing to research the impact of this amended guidance, however, does not expect this standard to have a material impact on its consolidated financial statements.

In November 2024, the FASB issued ASU No.

2024-03 – “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)”.

The guidance requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item.

For any remaining items within each relevant expense caption, entities must provide a qualitative description of the nature of those expenses.

The guidance also requires disclosure of the total amount of selling expenses and the entity’s definition of selling expenses.

The guidance is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, therefore, compliance with this ASU will be required beginning with the Company's annual report on Form 10-K for the year ending December 31, 2027.

The guidance may be applied prospectively or retrospectively, and early adoption is permitted.

The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

REAL ESTATE ASSETS

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Buildings, improvements and other intangibles 22,336,386 21,664,224

Right of use asset - finance lease 143,842 136,259

Right of use assets - finance lease 140,259 143,842

Intangible assets - tenant relationships 326,440 321,019

6 unchanged sentences

Real estate assets held for sale included in real estate assets, net $ 103,756 $ —

During the year ended December 31, 2024, the Company had 18 stores classified as held for sale.

Of the 18 stores, 10 had an estimated fair value, net of selling costs, which was less than their net carrying value.

As a result, during the year ended December 31, 2024, the Company recorded estimated losses of $ 63,250 on its consolidated statements of operations.

This amount is shown net of the sale of a property which generated a gain of $ 37,344 .

As of December 31, 2024, the Company had 13 stores classified as held for sale which are included in real estate assets, net .

Of the 13 stores, five had an estimated fair value, net of selling costs, of $ 43,107 , which was less than the net carrying value of the assets.

The loss on these stores is included in gain (loss) on real estate assets held for sale and sold, net.

Assets held for sale are included in the self-storage operations segment of the Company’s segment information.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

In September 2024, the Company amended existing triple-net lease agreements for land and buildings related to 27 stores that had initially been entered into in June and August 2019.

The Company also entered into new triple-net lease agreements for land and buildings related to 12 additional stores.

Both the initial 27 stores and the additional 12 stores added to the triple net lease structure are categorized as operating leases and have been presented in real estate assets - operating lease right-of-use assets and operating lease liabilities on the Company's consolidated balance sheets.

The Company amortizes to expense intangible assets—tenant relationships on a straight-line basis over the average period that a tenant is expected to utilize the facility (currently estimated at 18 months).

1 unchanged sentence

Amortization related to the tenant relationships and lease rights was $ 114,614 , $ 59,807 , and $ 13,981 for the years ended December 31, 2024, 2023 and 2022, respectively.

The remaining balance of the unamortized lease rights will be amortized over the next five to 39 years.

The remaining balance of the unamortized lease rights will be amortized over the next four to 38 years.

Accumulated amortization related to intangibles was $ 363,916 and $ 317,511 as of December 31, 2024 and 2023, respectively.

11 unchanged sentences

$ 548,986 $ 597,700

During the year ended December 31, 2024, the Company decided to operate all stores under a single brand.

As a result of that decision, the Company deemed the Life Storage trade name intangible asset to be impaired and recognized a loss for the full value of the asset.

A loss of 51,763 for the write-off of the asset and related costs has been recorded in impairment of Life Storage trade name on the Company's consolidated statements of operations for the year ended December 31, 2024.

The trade name was originally recorded at fair value based on royalty payments avoided had the trade name been owned by a third party.

This was determined using market royalty rates and a discounted cash flow analysis under the relief-from-royalty method.

Intangible assets are included in the self-storage operations segment of the Company’s segment information.

Depreciation of equipment and fixtures is computed on a straight-line basis over three to five years .

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The Life Storage Merger

On July 20, 2023, the Company closed its merger with Life Storage (the "Life Storage Merger" or "Merger"), which included 757 wholly-owned stores and one consolidated joint venture store.

Under the terms of the Life Storage Merger, Life Storage stockholders and holders of units of the Life Storage operating partnership received 0.895 of a share of common stock (or OP Unit, as applicable) of the Company for each issued and outstanding share (or operating partnership unit) of Life Storage they owned for total consideration of $ 11,602,808 , based on the Company's closing share price on July 19, 2023.

On July 20, 2023, the Company closed its merger with Life Storage (the “Life Storage Merger”), which included 757 wholly-owned stores and one consolidated joint venture store.

Under the terms of the Life Storage Merger, Life Storage stockholders and holders of units of the Life Storage operating partnership received 0.895 of a share of common stock (or OP Unit, as applicable) of the Company for each issued and outstanding share (or operating partnership unit) of Life Storage they owned for total equity consideration of $ 11,602,808 , based on the Company's closing share price on July 19, 2023.

At closing, the Company retired $ 1,160,000 in balances on Life Storage's line of credit which included $ 375,000 that Life Storage used to pay off its private placement notes in connection with the closing of the Life Storage Merger.

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Consideration and Purchase Price Allocation

The Merger was accounted for as an asset acquisition in accordance with ASC Topic 805 which requires that the cost of an acquisition be allocated on a relative fair value basis to the assets acquired and the liabilities assumed.

The Life Storage Merger was accounted for as an asset acquisition in accordance with ASC Topic 805 which requires that the cost of an acquisition be allocated on a relative fair value basis to the assets acquired and the liabilities assumed.

The following table summarizes the fair value of total consideration transferred in the Life Storage Merger:

34 unchanged sentences

The trade name is an indefinite lived asset and as such is not amortized.

During the year ended December 31, 2024, the Company decided to operate all stores under a single brand.

As a result of that decision, the Company deemed the Life Storage trade name intangible asset to be impaired and recognized a loss for the full value of the asset.

• Unsecured senior notes – Unsecured senior notes were recorded at fair value using readily available market data.

The below-market value of debt is recorded as a debt discount and reported as a reduction of the unsecured senior notes balance on the condensed consolidated balance sheets.

The discount is amortized using effective interest method as an increase to interest expense over the remaining terms of the unsecured senior notes.

The below-market value of debt is recorded as a debt discount and reported as a reduction of the unsecured senior notes, net balance on the consolidated balance sheets.

The discount is amortized using the effective interest method as an increase to interest expense over the remaining terms of the unsecured senior notes.

• Other assets and liabilities – The carrying values of cash, accounts receivable, prepaids and other assets, accounts payable, accrued expenses and other liabilities represented the fair values.

December 31, 2023 Three Months Ended December 31, 2023 For the Year Ended December 31, 2023

The Company amortizes to expense intangible assets - other on a straight-line basis.

The following table summarizes the accumulated amortization related to intangible assets - other:

December 31, 2024 For the Year Ended December 31, 2024 For the Year Ended December 31, 2023

Intangible Assets:

Gross Carrying Amount Accumulated Amortization Amortization Expense Amortization Expense

Trade name $ 50,000 $ — $ — $ —

Intangible assets - other $ 82,000 $ 49,819 $ 34,124 $ 15,695

132,000 15,695 9,417 15,695

Estimated Aggregate Amortization Expense

Intangible Assets:

2024 2025 2026

Trade name $ — $ — $ —

Intangible assets - other $ 19,833 $ 11,569

$ 23,375 $ 19,833 $ 11,569

Store Acquisition

Store Acquisitions

The following table shows the Company’s acquisitions of stores for the years ended December 31, 2024 and 2023.

The table excludes purchases of raw land and improvements made to existing assets.

All store acquisitions are considered asset acquisitions under ASU 2017-01, “ Business Combinations (Topic 805):

Clarifying the Definition of a Business .”

Consideration Paid Total

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Total consideration transferred $ 179,302

As part of this acquisition, we recorded an expense of $ 1,465 related to transaction costs.

As part of this acquisition, the Company recorded an expense of $ 1,465 related to transaction costs.

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the acquisition date:

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Pro Forma Information

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

As noted above, during the year ended December 31, 2022, the Company acquired Bargold.

1 unchanged sentence

Net income was excluded as it was impracticable to report expenses due to the lack of historical accrual basis accounting.

For the Year Ended December 31, 2022 For the Year Ended December 31, 2021

Pro Forma Pro Forma

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

For the Year Ended December 31, 2022

Total revenues $ 1,930,816

Store Dispositions

The Company disposed of one store on May 18, 2022 and one on June 21, 2022, for a total cash consideration of approximately $ 38.7 million, resulting in a gain of approximately $ 14.2 million.

During the year ended December 31, 2024, the Company closed on the sale of six stores for total consideration of $ 102,484 .

Five of the six stores had been classified as held for sale.

The five stores previously held for sale had been written down, resulting in a loss of $ 33,662 , while the sale of the sixth store resulted in a $ 37,344 gain.

These amounts have been recognized on the Company's consolidated statements of operations at December 31, 2024, presented within gain (loss) on real estate assets held for sale and sold, net.

The Company disposed of one store on May 18, 2022 and one on June 21, 2022, for a total cash consideration of approximately $ 38,745 , resulting in a gain of approximately $ 14,200 .

Both had been classified as held for sale.

On December 16, 2021 the Company sold 16 stores that had been classified as held for sale for total cash consideration of $ 200,292 .

The Company recorded a gain of $ 73,854 .

On March 1, 2021 the Company sold 16 stores that had been classified as held for sale to a newly established unconsolidated joint venture.

The Company received $ 132,759 and maintained a 55 % interest in the new joint venture valued at $ 33,878 .

The Company recognized a gain of $ 63,477 related to the sale of these properties.

INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES

Investments in unconsolidated real estate entities and Cash distributions in unconsolidated real estate ventures represent the Company's interest in preferred stock of SmartStop and Strategic Storage, an affiliate of SmartStop, and the Company's noncontrolling interest in real estate joint ventures that own stores.

Investments in unconsolidated real estate entities and cash distributions in unconsolidated real estate ventures represent the Company's interest in preferred stock of SmartStop and Strategic Storage, an affiliate of SmartStop, and the Company's noncontrolling interest in real estate joint ventures.

The Company accounts for its investments in SmartStop and Strategic Storage preferred stock, which do not have a readily determinable fair value, at the transaction price less impairment, if any.

13 unchanged sentences

HF1 Sovran HHF Storage Holdings LLC (2)

37 49 % 49 %- 59 %

304,526 105,339

Storage Portfolio II JV LLC 36 10 % 30 % ( 9,584 ) ( 8,314 )

3 unchanged sentences

HF2 Sovran HHF Storage Holdings II LLC (2)

22 49 % 49 %- 59 %

114,034 41,613

HF5 Life Storage-HIERS Storage LLC 17 20 % 20 % 25,192 26,051

6 unchanged sentences

119 10 %- 50 %

314,852 317,104

SmartStop Self Storage REIT, Inc.

5 unchanged sentences

Net Investments in and Cash distributions in unconsolidated real estate entities 460 $ 1,257,019 $ 1,000,548

Investments in unconsolidated real estate entities $ 1,332,338 $ 1,071,617

Cash distributions in unconsolidated real estate ventures ( 75,319 ) ( 71,069 )

Net Investments in and Cash distributions in unconsolidated real estate entities $ 1,257,019 $ 1,000,548

(1) Includes pro-rata equity ownership share and promoted interest.

(2) In October 2019, the Company invested $ 200,000 in shares of convertible preferred stock of SmartStop with a dividend rate of 6.25 % per annum, subject to increase after five years .

The preferred shares are generally not redeemable for five years , except in the case of a change of control or initial listing of SmartStop.

Dividend income from this investment is included on the equity in earnings and dividend income from unconsolidated real estate entities line on the Company's condensed consolidated statements of operations.

(2) In November 2024, the Company acquired additional ownership interest in HF1 Sovran HHF Storage Holdings LLC and HF2 Sovran HHF Storage Holdings II LLC from its partner in the unconsolidated joint ventures for cash consideration of $ 251,235 .

The transaction increased the equity ownership percentages from 20 % and 15 %, respectively, to 49 % in each unconsolidated joint venture.

The additional investment is presented on the Company's consolidated balance sheets under investments in unconsolidated real estate entities.

(3) In September 2024, the Company sold its membership interest in the Alan Jathoo JV LLC unconsolidated joint venture, which held nine stores, to its partner in such joint venture and recognized a gain of $ 3,406 on the transaction.

This gain and the gain from the ESS Bristol Investments LLC transaction referenced below are presented in equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest on the Company's consolidated statements of operations for the year ended December 31, 2024.

(4) In August 2024, the ESS Bristol Investments LLC unconsolidated joint venture sold five of its eight stores to another of the Company's unconsolidated joint ventures, and the Company recognized a gain of $ 10,324 for its pro rata share of the transaction.

The Company then acquired its partner's membership interest in the remaining three stores held by ESS Bristol Investments LLC, which is now presented under real estate assets, net on the Company's consolidated balance sheets.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

(5) In May 2023, the Company invested $ 150,000 in shares of convertible preferred stock of Strategic Storage with a dividend rate of 8.35 % per annum, subject to increase after five years .

The preferred shares are generally not redeemable for three years , except in the case of a change of control or initial listing of Strategic Storage.

In June 2021, the Company sold its interest in two unconsolidated joint ventures to its joint venture partner.

The Company received proceeds of $ 1,888 in cash, and recorded a gain of $ 525 which is included in Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partner's interest in the Company's condensed consolidated statements of operations.

The Company also purchased its joint venture partners' interests in two unconsolidated joint ventures.

Also in June 2021, the WICNN JV LLC and GFN JV, LLC joint ventures sold all 17 of the stores owned by the joint ventures to a third party.

Subsequent to the sales, these joint ventures were dissolved.

As a result of these transactions, the Company recorded a gain of $ 5,739 , which is included in Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and purchase of joint venture partner's interest in the Company's consolidated statements of operations.

Dividend income from this investment is included on the equity in earnings and dividend income from unconsolidated real estate entities on the Company's consolidated statements of operations.

(6) In October 2019, the Company invested $ 200,000 in shares of convertible preferred stock of SmartStop with a dividend rate of 6.25 % per annum.

On November 1, 2024, the dividend rate increased to 7.00 % per annum, and is now subject to increase each year.

The preferred shares are generally not redeemable for five years , except in the case of a change of control or initial listing of SmartStop.

Dividend income from this investment is included on the equity in earnings and dividend income from unconsolidated real estate entities line on the Company's consolidated statements of operations.

Subsequent to year end, on February 4, 2025, the Company invested $ 100,000 in shares of newly issued convertible preferred stock of Strategic Storage Growth Trust III, Inc., an affiliate of SmartStop Self Storage REIT, Inc.

The dividend rate for the preferred shares is 8.85 % per annum, subject to increase after five years .

The preferred shares are generally not redeemable for five years , except in the case of a change of control or initial listing, and are redeemable thereafter subject to a redemption premium.

In accordance with ASC 810, the Company reviews all of its joint venture relationships annually to ensure that there are no entities that require consolidation.

As of December 31, 2024, there were no previously unconsolidated entities that were required to be consolidated as a result of this review.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

The Company entered into 17 new unconsolidated real estate joint ventures (including 16 from the Life Storage Merger), which added a total of 146 stores and a total investment of $ 305,921 to the Company's portfolio during the year ended December 31, 2023.

Additionally, the Company's existing joint ventures added nine stores for a total investment of $ 27,583 during the year ended December 31, 2023.

The Company accounts for its investment in these ventures under the equity method of accounting.

The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting.

Equity in earnings and dividend income from unconsolidated real estate entities consists of the following:

3 unchanged sentences

Equity in earnings of HF1 Sovran HHF Storage Holdings LLC (1)

4,977 1,553 —

Equity in earnings of Storage Portfolio II JV LLC 2,661 3,094 3,398

5 unchanged sentences

Equity in earnings of HF6 191 V Life Storage Holdings LLC (1)

( 891 ) ( 735 ) —

Equity in earnings of ESS-CA TIVS JV LP 3,574 3,873 2,753

6 unchanged sentences

$ 67,272 $ 54,835 $ 41,428

(1) The earnings of the 16 joint ventures from the Life Storage Merger are from the close of acquisition on July 20, 2023.

(1) For the year ended December 31, 2023, the earnings of the 16 joint ventures from the Life Storage Merger are from the close of acquisition on July 20, 2023.

Equity in earnings of certain of our joint ventures includes the amortization of the Company’s excess purchase price of $ 60,253 of these equity investments over its original basis.

2 unchanged sentences

Management fee revenues for affiliated real estate joint ventures for the years ended December 31, 2024, 2023 and 2022 were $ 38,940 , $ 31,755 and $ 24,389 , respectively.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

INVESTMENTS IN DEBT SECURITIES AND NOTES RECEIVABLE

8 unchanged sentences

$ 1,550,950 $ 904,769

In November 2020, the Company invested $ 300,000 in the preferred stock of JCAP in connection with the acquisition of JCAP by affiliates of NexPoint.

In November 2020, the Company invested $ 300,000 in the preferred stock of JCAP in connection with the acquisition of JCAP by NexPoint.

This investment consisted of 200,000 Series A Preferred Shares valued at a total of $ 200,000 , and 100,000 Series B Preferred Shares valued at a total of $ 100,000 .

In December 2022, the Company completed a modification with Nexpoint Storage Partners (as successor in interest to JCAP) that exchanged the Series A and B Preferred Shares for 300,000 Series D Preferred Shares, valued at a total of $ 300,000 .

The JCAP Series D preferred stock is mandatorily

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

redeemable after six years from the modification in December 2022, with two one-year extension options.

NexPoint may redeem the Preferred Shares at any time, subject to certain prepayment penalties.

The Company accounts for the JCAP preferred stock as a held to maturity debt security at amortized cost and evaluates whether the fair value is below the amortized cost basis at each reporting period.

The Series D Preferred Shares have initial dividend rates of 8.5 %.

In December 2022, the Company completed a modification with Nexpoint Storage Partners (as successor in interest to JCAP) that exchanged the Series A and Series B Preferred Shares for 300,000 Series D Preferred Shares, valued at a total of $ 300,000 .

The Series D Preferred Shares are mandatorily redeemable after six years from the modification in December 2022, with two one-year extension options.

NexPoint may redeem the Series D Preferred Shares at any time, subject to certain prepayment penalties.

The Company accounts for the Series D Preferred Shares as a held to maturity debt security at amortized cost and evaluates whether the fair value is below the amortized cost basis at each reporting period.

The Series D Preferred Shares have an initial dividend rate of 8.5 %.

If the investment is not retired after six years , the preferred dividends increase annually.

5 unchanged sentences

The remaining unamortized discount was recognized in that quarter as interest income.

The Company provides bridge loan financing to third-party self-storage operators.

These notes receivable consist of mortgage loans receivable, which are collateralized by self-storage properties, and unsecured mezzanine loans receivable.

The Company offers bridge loan financing to certain of its third-party self-storage owners.

These notes receivable consist of mortgage loans receivable, which are collateralized by self-storage properties that the Company manages, and mezzanine loans receivable, which are secured by equity interest pledges.

As of December 31, 2024, 74 % of the notes held are mortgage receivables.

The Company intends to sell a portion of the mortgage receivables.

The Company may sell a portion of the mortgage receivables.

These notes receivable typically have a term of three years with two one-year extensions and have variable interest rates.

During the year ended December 31, 2023, the Company sold a total principal amount of $ 167,495 of its mortgage bridge loans receivable to third parties for a total of $ 167,495 in cash, closed on $ 283,039 in initial loan draws, and recorded $ 27,366 of draws from interest holdbacks.

The bridge loans typically have a loan to value ratio between 70 % and 80 %.

None of the debt securities or notes receivable are in past-due or nonaccrual status and the allowance for potential credit losses is immaterial.

During the year ended December 31, 2024, the Company sold a total principal amount of $ 183,632 of its mortgage bridge loans receivable to third parties for a total of $ 183,632 in cash, closed on $ 845,760 in initial loan draws, and recorded $ 54,545 of draws for interest payments.

The bridge loans typically have a loan to value ratio between 70 % and 80 % at origination.

During the year ended December 31, 2024, one of the notes receivable entered nonaccrual status.

Subsequent to year end, the Company purchased the property that collateralized the note, which was paid off at the time of close, with no gain or loss recognized.

No other notes receivable are in past-due or nonaccrual status.

The allowance for potential credit losses is immaterial.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

The components of term debt are summarized as follows:

Term Debt December 31, 2023 December 31, 2022 Fixed Rate Variable Rate (2)

Maturity Dates

Secured fixed-rate (1)

$ 401,319 $ 521,820 2.67 % - 4.62 %

April 2025 - February 2030

Secured variable-rate (1)

Term Debt December 31, 2024 December 31, 2023

Secured notes payable (1)

$ 1,013,661 $ 1,279,105

November 2024 - September 2030

Unsecured fixed-rate 7,921,633 4,240,376 2.08 % - 5.90 %

January 2025 - March 2032

Unsecured variable-rate 1,463,367 884,624 6.30 % - 6.63 %

June 2024 - July 2029

Unsecured term loans 2,200,000 2,660,000

Unsecured senior notes 8,025,000 6,725,000

Total 11,238,661 10,664,105

Discount on unsecured senior notes (3)

Discount on unsecured senior notes, net (2)

( 222,254 ) ( 274,350 )

2 unchanged sentences

(1) The loans are collateralized by mortgages on real estate assets and the assignment of rents.

(2) Basis rates include Term SOFR and Daily Simple SOFR

(2) Unsecured senior notes from the Life Storage Merger were recorded at fair value, resulting in a discount to be amortized over the term of the debt.

The following table summarizes the scheduled maturities of term debt, excluding available extensions, at December 31, 2024:

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

2025 $ 780,922

5 unchanged sentences

2031 1,650,000

Thereafter 400,000

Total $ 11,238,661

On June 22, 2023, the Company entered into the Third Amended and Restated Credit Agreement (the "Credit Agreement") which increased the commitment of the revolving credit facility to $ 1,940,000 , and later to $ 2,000,000 with an Increasing Lender Supplement entered into in August 2023, and extended its maturity to June 2027.

In connection with entering into the Credit Agreement, the Company paid off Tranche 5 and added the Tranche 8 term loan, maturing June 2024, which allowed the Company to draw up to $ 1,000,000 in connection with the Life Storage Merger.

Tranche 8 was fully drawn on July 20, 2023, in connection with the closing of the Life Storage Merger, paid down to $ 400,000 in December 2023, and fully paid off in January 2024.

On November 20, 2024, the Company established a commercial paper note program.

Under the terms of the program, the Company may issue up to $ 1 billion of unsecured commercial paper notes that bear interest at variable rates with a maturity of varying amounts (generally 30 days or less, with a maximum of 397 days).

The commercial paper notes are issued under customary terms in the commercial paper market and are issued at a discount from par or, alternatively, can be issued at par and bear varying interest rates on a fixed or floating basis.

The net proceeds from the issuances of the notes will be used for general working capital and other general corporate purposes.

General corporate purposes may include, but are not limited to, the repayment of other debt and selective development, redevelopment, or acquisition of properties.

Outstanding commercial paper notes have been included in revolving lines of credit and commercial paper on the Company's consolidated balance sheets.

The commercial paper notes sold during the year ended December 31, 2024 had a weighted-average maturity term of 20 days.

At December 31, 2024, there were $ 500 million in issuances outstanding under the commercial paper program.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

All of the Company’s lines of credit and commercial paper are guaranteed by the Company.

The following table presents information on the Company’s lines of credit and commercial paper for the periods indicated:

As of December 31, 2024

Revolving Lines of Credit and Commercial Paper Amount Drawn Capacity Interest Rate Maturity Basis Rate (1)

Secured credit line $ 25,000 $ 140,000 5.8 % 7/1/2026 SOFR plus 1.35 %

Unsecured credit line (2)

837,000 2,000,000 5.4 % 6/22/2027 SOFR plus 0.875 %

Commercial paper 500,000 1,000,000 4.8 % (3)

$ 1,362,000 $ 3,140,000

(1) Daily Simple Secured Overnight Financing Rate (“SOFR”) for credit lines.

(2) Basis Rate as of December 31, 2024.

Rate is subject to change based on the Company's investment grade rating.

(3) Commercial paper interest rate is variable based on market rates at the time of each issuance.

Therefore, interest rate shown in the table above is a weighted average interest rate.

On June 22, 2023, the Company entered into the Third Amended and Restated Credit Agreement (the “Credit Agreement”).

Pursuant to the terms of the Credit Agreement, the Company may request an extension of the term of the revolving credit facility for up to two additional periods of six months each, after satisfying certain conditions.

On August 11, 2023, the capacity was increased by $ 60 million.

On August 21, 2024, the Company entered into Amendment 1 to the Third Amended and Restated Credit Agreement, which increased the overall term debt borrowings by $ 275,000 and reduced the spread on a portion of term debt borrowings by 30 basis points.

As of December 31, 2024, amounts outstanding under the revolving credit facility bore interest at floating rates, at the Company’s option, equal to either (i) Adjusted Term or Daily Simple SOFR plus the applicable margin or (ii) the applicable base rate which is the applicable margin plus the highest of (a) 0.0 %, (b) the federal funds rate plus 0.50 %, (c) U.S.

4 unchanged sentences

As of December 31, 2024, the Company was in compliance with all of its financial covenants.

All of the Company’s lines of credit are guaranteed by the Company.

The following table presents information on the Company’s lines of credit, the proceeds of which are used to repay debt and for general corporate purposes, for the periods indicated:

As of December 31, 2023

Revolving Lines of Credit Amount Drawn Capacity Interest Rate Maturity Basis Rate (1)

Credit Line 1 (2)

$ 40,000 $ 140,000 6.7 % 7/1/2026 SOFR plus 1.35 %

Credit Line 2 (3)(4)

642,000 2,000,000 6.3 % 6/22/2027 ASOFR plus 0.775 %

$ 682,000 $ 2,140,000

(1) Daily Simple SOFR

(2) Secured by mortgages on certain real estate assets.

On January 13, 2023 the maturity date was extended to July 1, 2026 with one extension of one year available.

(3) Unsecured.

On June 22, 2023, the maturity date was extended to June 22, 2027 with two six -month extensions available.

On August 11, 2023, the capacity was increased by $ 60 million.

(4) Basis Rate as of December 31, 2023.

Rate is subject to change based on the Company's investment grade rating.

As of December 31, 2024, the Company’s percentage of fixed-rate debt to total debt was 75.8 %.

1 unchanged sentence

The combined weighted average interest rate was 4.4 %.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

The Company is exposed to certain risk arising from both its business operations and economic conditions.

3 unchanged sentences

The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash payments principally related to the Company’s borrowings.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements.

To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy.

To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy.

Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

2 unchanged sentences

During the years ended December 31, 2024, 2023 and 2022, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt.

During 2024, the Company estimates that $ 19,010 will be reclassified as a decrease to interest expense.

The following table summarizes the terms of the Company’s 15 active and four forward-starting derivative financial instruments, which have a total combined current notional amount of $ 1,448,566 as of December 31, 2023:

During 2025, the Company estimates that $ 9,869 will be reclassified as an increase to interest income.

The following table summarizes the terms of the Company’s 13 active derivative financial instruments, which had a total current notional amount of $ 1,381,834 as of December 31, 2024, and one forward-starting derivative financial instruments with an effective date of July 14, 2025.

Hedge Product Range of Notional Amounts Strike Effective Dates Maturity Dates

3 unchanged sentences

Fair Values of Derivative Instruments

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets:

The table below presents the fair values of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets:

Asset / Liability Derivatives

4 unchanged sentences

Effect of Derivative Instruments

The tables below present the effect of the Company’s derivative financial instruments on the consolidated statements of operations for the periods presented.

The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of operations for the periods presented.

No tax effect has been presented as the derivative instruments are held by the Company:

2 unchanged sentences

Swap Agreements $ 22,141 $ 8,730 Interest expense $ 26,885 $ 41,541 $ ( 7,877 )

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

Credit-Risk-Related Contingent Features

2 unchanged sentences

Failure to comply with the loan covenant provisions would result in the Company being in default on any derivative instrument obligations covered by the agreement.

As of December 31, 2023, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $ 5,082 .

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

As of December 31, 2024, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk related to these agreements, was immaterial.

As of December 31, 2024, the Company had not posted any collateral related to these agreements.

If the Company had breached any of these provisions as of December 31, 2023, it could have been required to cash settle its obligations under these agreements at their termination value of $ 5,082 .

If the Company had breached any of these provisions as of December 31, 2024, it could have been required to cash settle its obligations under these agreements at their termination value.

STOCKHOLDERS’ EQUITY

2 unchanged sentences

All holders of the Company's common stock are entitled to receive dividends and to one vote on all matters submitted to a vote of stockholders.

The transfer agent and registrar for the Company’s common stock is American Stock Transfer & Trust Company.

The transfer agent and registrar for the Company’s common stock is Broadridge Corporate Issuer Solutions, LLC.

During the year ended December 31, 2024, the Company sold no shares of common stock.

On July 20, 2023, the Company issued 76,217,359 shares of its common stock for a total value of $ 11,353,338 .

This was based on an exchange ratio of 0.895 per share conversion of Life Storage common stock at the Company's closing share price on July 19, 2023 of $ 148.96 as part of the Life Storage Merger.

On January 7, 2022, the Company issued 186,766 shares of its common stock to acquire two stores for $ 40,965 .

On August 9, 2021, the Company filed its $ 800,000 "at the market" equity program with the Securities and Exchange Commission using a shelf registration statement on Form S-3, and entered into separate equity distribution agreements with ten sales agents.

No shares have been sold under the current "at the market" equity program.

From January 1, 2021, through August 8, 2021, the Company sold 585,685 shares of common stock under its prior "at the market" equity program at an average sales price of $ 115.90 per share resulting in net proceeds of 66,617 .

On March 23, 2021, the Company sold 1,600,000 shares of its common stock in a registered offering structured as a bought deal at a price of $ 129.13 per share resulting in net proceeds of 206,572 .

On April 15, 2024, the Company filed its $ 800,000 “at the market” equity program with the Securities and Exchange Commission using a shelf registration statement on Form S-3, and entered into an equity distribution agreement with nine sales agents.

No shares have been sold under the current “at the market” equity program, and no shares were sold under the previous “at the market” equity program, which spanned from August 9, 2021 through April 14, 2024.

On November 13, 2023, the Company's board of directors authorized a share repurchase program allowing for the repurchase of shares with an aggregate value up to $ 500,000 .

During the year ended December 31, 2023, no shares were repurchased.

During the year ended December 31, 2023 and the year ended December 31, 2024, no shares were repurchased.

As of December 31, 2024, the Company had remaining authorization to repurchase shares with an aggregate value up to $ 500,000 .

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

On July 20, 2023, the Company issued 76,217,359 shares of its common stock at $ 148.96 for a total value of $ 11,353,338 as part of the Life Storage Merger.

See Property Acquisitions and Dispositions note above.

On January 7, 2022, the Company issued 186,766 shares of its common stock to acquire two stores for $ 40,965 .

NONCONTROLLING INTEREST REPRESENTED BY PREFERRED OPERATING PARTNERSHIP UNITS

4 unchanged sentences

The Company has evaluated the terms of the Operating Partnership’s preferred units and classifies the noncontrolling interest represented by such preferred units as stockholders’ equity in the accompanying consolidated balance sheets.

The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling amount as permanent equity in the consolidated balance sheets.

Any noncontrolling interests that fail to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (1) the carrying amount, or (2) its redemption value as of the end of the period in which the determination is made.

At December 31, 2023 and 2022, the noncontrolling interests represented by the Preferred OP Units qualified for classification as permanent equity on the Company's consolidated balance sheets.

The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling interest as permanent equity in the consolidated balance sheets.

Any noncontrolling interests that fail to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (1) the carrying amount and (2) the redemption value as of the end of the period in which the determination is made.

At December 31, 2024 and December 31, 2023, the noncontrolling interests represented by the Preferred OP Units qualified for classification as permanent equity on the Company's consolidated balance sheets.

The partnership agreement of the Operating Partnership (as amended, the “Partnership Agreement”) provides for the designation and issuance of the OP Units.

As of December 31, 2023 and 2022, noncontrolling interests in Preferred OP Units were presented net of notes receivable from Preferred Operating Partnership unit holders of $ 100,000 as of December 31, 2023 and 2022, respectively, as more fully described below.

The balances for each of the specific preferred OP units as presented in the Statement of Noncontrolling Interests and Equity as of the periods indicated is as follows:

The balances for each of the specific Preferred OP units as presented in the Statement of Noncontrolling Interests and Equity as of the periods indicated are as follows:

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

December 31, 2024 December 31, 2023

Series A Units $ — $ 16,498

Series B Units $ 33,567 $ 33,567

4 unchanged sentences

The Series A Units have priority over all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series A Units were issued in June 2007.

Series A Units in the amount of $ 101,700 bear a fixed priority return of 2.3 %, and originally had a fixed liquidation value of $ 115,000 .

The remaining balance participates in distributions with, and has a liquidation value equal to, that of the common OP Units.

The Series A Units are redeemable at the option of the holder, which redemption obligation may be satisfied, at the Company’s option, in cash or shares of its common stock.

As a result of the redemption of 114,500 Series A Units in October 2014, the remaining fixed liquidation value was reduced to $ 101,700 which represents 875,480 Series A Units.

On June 25, 2007, the Operating Partnership loaned the holders of the Series A Units $ 100,000 .

The note receivable bears interest at 2.1 %.

The loan is secured by the borrower’s Series A Units.

No future redemption of Series A Units can be made unless the loan secured by the Series A Units is also repaid.

The Series A Units are shown on the balance sheet net of the $ 100,000 loan because the borrower under the loan is also the holder of the Series A Units.

On January 25, 2023, the redemption obligation for all outstanding Series A Units was satisfied in $ 5,000 cash and 851,698 shares of its common stock, which was net of the noncash settlement of the $ 100,000 loan.

result of this redemption, no Series A Units were outstanding as of December 31, 2023.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

As of December 31, 2024 and December 31, 2023, there were no outstanding Series A Units.

Series B Redeemable Preferred Units

1 unchanged sentence

The Series B Units rank junior to the Series A Units, on parity with the Series C Units (defined below) and Series D Units, and senior to all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series B Units were issued in 2013 and 2014, have been redeemed at various times, and have a liquidation value of $ 25.00 per unit for a current fixed liquidation value of $ 33,567 which represents 1,342,727 Series B Units outstanding at December 31, 2023.

The Series B Units were issued in 2013 and 2014.

The Series B Units have a liquidation value of $ 25.00 per unit for a fixed liquidation value of $ 33,567 which represents 1,342,727 Series B Units outstanding at December 31, 2024.

Holders of the Series B Units receive distributions at an annual rate of 6.0 %.

These distributions are cumulative.

The Series B Units became redeemable at the option of the holder on the first anniversary of the date of issuance, which redemption obligations may be satisfied at the Company’s option in cash or shares of its common stock.

Series C Convertible Redeemable Preferred Units

The Series B Units become redeemable at the option of the holder on the first anniversary of the date of issuance, which redemption obligation may be satisfied at the Company’s option in cash or shares of its common stock.

Series C Redeemable Preferred Units

The Partnership Agreement provides for the designation and issuance of the Series C Units.

5 unchanged sentences

The Partnership Agreement provides for the designation and issuance of the Series D Units.

The Series D Units rank junior to the Series A Units, on parity with the Series B Units and Series C Units, and senior to all other partnership interest of the Operating Partnership with respect to distributions and liquidation.

The Series D Units have a liquidation value of $ 25.00 per unit, for a current fixed liquidation value of $ 188,793 which represents 7,551,735 Series D Units outstanding at December 31, 2023.

The Series D Units rank junior to the Series A Units, on parity with the Series B Units and Series C Units, and senior to all other partnership interests of the Operating Partnership with respect to distributions and liquidation.

The Series D Units have a liquidation value of $ 25.00 per unit, for a fixed liquidation value of $ 42,525 , which represents 1,700,989 Series D Units outstanding at December 31, 2024.

Holders of the Series D Units receive distributions at an annual rate between 3.0 % and 5.0 %.

1 unchanged sentence

The Series D Units become redeemable at the option of the holder on the first anniversary of the date of issuance, which redemption obligation may be satisfied at the Company’s option in cash or shares of its common stock.

In addition, certain of the Series D Units are exchangeable for common OP Units until the tenth anniversary of the date of issuance, with the number of common OP Units to be issued equal to $ 25.00 per Series D Unit, divided by the value of a share of common stock as of the exchange date.

In addition, certain of the Series D Units are exchangeable for OP Units at the option of the holder until the tenth anniversary of the date of issuance, with the number of OP Units to be issued equal to $ 25.00 per Series D Unit, divided by the value of a share of common stock as of the exchange date.

During the year ended December 31, 2024, 1,242,168 Series D Units were redeemed for 213,661 shares of common stock.

On October 1, 2024, 3,507,844 Series D Units were liquidated and returned to the Company.

In exchange, the former holders of the Series D Units were issued notes totaling $ 87,696 , which represented the total liquidation value of the Units, due on January 1, 2050.

Interest will be paid to the former Unit holders quarterly, commencing December 31, 2024, at the existing rate of 3.35 %.

The full liquidation value was reclassified from noncontrolling interest represented by preferred operating partnership units to other liabilities on the Company's consolidated balance sheets.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

On December 27, 2024, 1,100,734 Series D Units were converted to 183,398 Common OP Units.

As a result $ 27,518 was moved from noncontrolling interest represented by preferred operating partnership units to noncontrolling interests in operating partnership, net and other noncontrolling interests on the Company's consolidated balance sheets.

In January 2023, 890,594 Series D units were redeemed for 154,307 shares of common stock.

3 unchanged sentences

issued a total of 240,000 Series D Units valued at $ 6,000 in connection with the acquisition of Bargold.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

NONCONTROLLING INTEREST IN OPERATING PARTNERSHIP AND OTHER NONCONTROLLING INTERESTS

1 unchanged sentence

The Company’s interest in its stores is held through the Operating Partnership.

Between its general partner and limited partner interests, the Company held a 95.2 % majority ownership interest in the Operating Partnership as of December 31, 2023.

Between its general partner and limited partner interests, the Company held a 95.6 % ownership interest in the Operating Partnership as of December 31, 2024.

The remaining ownership interests in the Operating Partnership (including Preferred OP Units) of 4.4 % are held by certain former owners of assets acquired by the Operating Partnership.

As of December 31, 2023 and 2022, the noncontrolling interests in the Operating Partnership are shown on the balance sheet net of notes receivable of $ 1,900 and $ 1,900 , respectively, because the borrowers under the loan receivable are also holders of OP Units (Note 12).

This loan receivable bears interest at 5.0 % per annum and matures on December 15, 2024.

As of December 31, 2023, the noncontrolling interest in the Operating Partnership is shown on the balance sheet net of a note receivable of $ 1,900 because a borrower under the note receivable was also a holder of OP Units.

This note receivable originated in December 2014, bore interest at 5.0 % per annum and matured on December 15, 2024.

As of December 31, 2024, the noncontrolling interest in the Operating Partnership is shown on the balance sheet net of a new note receivable of $ 50,000 because a borrower under the note receivable is also a holder of OP Units.

This note receivable originated in December 2024, bears interest at 10 % per annum and matures on December 30, 2025.

The noncontrolling interest in the Operating Partnership represents OP Units that are not owned by the Company.

OP Units are redeemable at the option of the holder, which redemption may be satisfied at the Company's option in cash, based upon the fair market value of an equivalent number of shares of the Company’s common stock (based on the ten-day average trading price) at the time of the redemption, or shares of the Company's common stock on a one -for-one basis, subject to anti-dilution adjustments provided in the Operating Partnership Agreement.

As of December 31, 2023, the ten-day average closing stock price was $ 156.68 and there were 8,885,594 OP Units outstanding.

As of December 31, 2024, the ten-day average closing price of the Company's common stock was $ 148.35 and there were 9,353,941 OP Units outstanding.

Assuming that all of the OP Unit holders exercised their right to redeem all of their OP Units on December 31, 2024 and the Company elected to pay the OP Unit holders cash, the Company would have paid $ 1,387,657 in cash consideration to redeem the units.

5 unchanged sentences

Cash paid for OP Units redeemed $ 2,341 $ 108 $ 4,617

OP Units issued in conjunction with business combination and acquisitions 1,674,748 711,037 897,803

Value of OP Units issued in conjunction with business combination and acquisitions $ 249,470 $ 141,000 $ 188,319

OP Units issued in conjunction with business combination, acquisitions, and preferred unit conversion 807,019 1,674,748 711,037

Value of OP Units issued in conjunction with business combination, acquisitions, and preferred unit conversion $ 127,932 $ 249,470 $ 141,000

GAAP requires a company to present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section but separate from the Company’s equity.

1 unchanged sentence

If noncontrolling interests are determined to be redeemable, they are to be carried at their redemption value as of the balance sheet date and reported as temporary equity.

The Company has evaluated the terms of the common OP Units and classifies the noncontrolling interest represented by the common OP Units as stockholders’ equity in the accompanying consolidated balance sheets.

The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling amount as permanent equity in the consolidated balance sheets.

Other Noncontrolling Interests

Other noncontrolling interests represent the ownership interest of partners in nine consolidated joint ventures as of December 31, 2023.

These joint ventures have ownership in 12 stores;

two are operating and the remaining are under development.

The voting interests of the partners are 31 % or less.

The Company has evaluated the terms of the OP Units and classifies the noncontrolling interest represented by the OP Units as stockholders’ equity in the accompanying consolidated balance sheets.

The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling amount as permanent equity in the

EXTRA SPACE STORAGE INC.

1 unchanged sentence

Amounts in thousands, except store and share data, unless otherwise stated

consolidated balance sheets.

Other Noncontrolling Interests

Other noncontrolling interests represent the ownership interest of partners in ten consolidated joint ventures as of December 31, 2024.

There are a total of 14 stores in consolidated joint ventures, nine of which are operating and the other five of which are under development.

The voting interests of the partners are 17.0 % or less.

Based on the facts and circumstances of each of the Company’s joint ventures, the Company has determined that one of the joint ventures at December 31, 2024 was a variable interest entity (“VIE”) in accordance with ASC 810, “Consolidation.” The Company has consolidated that joint venture as it was determined that the Company has the power to direct the activities of the joint venture and is the primary beneficiary of the joint venture.

Lessee Accounting

The Company accounts for leases under ASC 842, "Leases." Right-of-use assets associated with operating leases are included in “Real estate assets - operating lease right-of-use assets” and operating lease liabilities are included in “Operating lease liabilities” on the Company's consolidated balance sheets.

The Company accounts for leases under ASC 842, “ Leases.

” Right-of-use assets associated with operating leases are included in real estate assets - operating lease right-of-use assets and operating lease liabilities are included in operating lease liabilities on the Company's consolidated balance sheets.

Right-of-use assets associated with finance leases are included in real estate assets, net and finance lease liabilities are included in other liabilities on the Company's consolidated balance sheets.

9 unchanged sentences

• Leases of 21 regional offices.

These leases have original lease terms between three and five years .

These leases have original lease terms between two and five years .

The Company has the option on certain of these leases to extend the lease term for up to three additional years.

11 unchanged sentences

The Company will recognize costs from these variable lease payments in the period in which the obligation for those payments is incurred.

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available surrounding the Company’s unsecured borrowing rates and implied secured spread at the lease commencement date in determining the present value of lease payments.

These discount rates vary depending on the term of the specific leases.

EXTRA SPACE STORAGE INC.

1 unchanged sentence

Amounts in thousands, except store and share data, unless otherwise stated

Following is information on our total lease costs as of the period indicated:

commencement date in determining the present value of lease payments.

These discount rates vary depending on the term of the specific leases.

The following is information on our total lease costs as of the period indicated:

For the Year Ended December 31,

25 unchanged sentences

Total $ 1,373,243 $ 380,861 $ 1,754,104

Present value adjustments ( 71,655 ) ( 244,004 ) ( 315,659 )

Present value adjustments (Less:

future interest expense) ( 667,398 ) ( 239,078 ) ( 906,476 )

Lease liabilities $ 705,845 $ 141,783 $ 847,628

7 unchanged sentences

All self-storage leases for which the Company acts as lessor have been classified as operating leases.

The real estate assets related to the Company's stores are included in "Real estate assets, net" on the Company's condensed consolidated balance sheets and are presented at historical cost less accumulated depreciation and impairment, if any.

Rental income related to these operating leases is included in "Property rental" revenue on the Company's condensed consolidated statements of operations, and is recognized each month during the month-to-month terms at the rental rate in place during each month.

The real estate assets related to the Company's stores are included in real estate assets, net on the Company's consolidated balance sheets and are presented at historical cost less accumulated depreciation and impairment, if any.

Rental income related to these operating leases is included in property rental revenue on the Company's consolidated statements of operations, and is recognized each month as part of the month-to-month terms at the rental rate in place during each month.

STOCK-BASED COMPENSATION

3 unchanged sentences

Options expire 10 years from the date of grant.

All of the Company's remaining outstanding options were exercised during the year ended December 31, 2024.

As defined under the terms of the Plan, restricted stock grants may be awarded.

3 unchanged sentences

Unless otherwise determined by the Compensation Committee at the time of grant, the forfeiture and transfer restrictions on the shares lapse over a one-year period or a four-year period beginning on the date of grant.

For actions taken prior to July 2020, references to the Compensation Committee refer to its predecessor, the CNG Committee;

the Board split the CNG Committee into two committees, the Compensation Committee and the Nominating and Governance Committee, effective July 1, 2020.

Option Grants

A summary of stock option activity is as follows:

Options Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value as of December 31, 2022

Options Number of Shares Weighted Average Exercise Price

Outstanding at December 31, 2021 9,272 $ 82.47

5 unchanged sentences

Outstanding at December 31, 2024 — $ —

Vested 9,272 $ 82.47 1.98 $ 1,338

Ending Exercisable 9,272 $ 82.47 1.98 $ 1,338

The aggregate intrinsic value in the table above represents the total value (the difference between the Company’s closing stock price on the last trading day of 2023 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2023.

The amount of

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

aggregate intrinsic value will change based on the fair market value of the Company’s stock.

The total intrinsic value of options exercised for the years ended December 31, 2024, 2023 and 2022 was $ 798 , $ 0 and $ 0 , respectively.

There have been no options granted since 2016.

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model.

The Black-Scholes model incorporates assumptions to value stock-based awards.

The risk-free rate is based on the U.S.

Treasury yield curve in effect at the time of the grant for the estimated life of the option.

The Company uses actual historical data to calculate the expected price volatility, dividend yield and average expected term.

The forfeiture rate, which is estimated at a weighted-average of 4.6 % of unvested options outstanding as of December 31, 2023, is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimates.

A summary of stock options outstanding and exercisable as of December 31, 2023, is as follows:

Options Outstanding Options Exercisable

Exercise Price Shares Weighted Average Remaining Contractual Life Weighted Average Exercise Price Shares Weighted Average Exercise Price

$ 65.36 - $ 65.36

1,582 1.15 $ 65.36 1,582 $ 65.36

$ 85.99 - $ 85.99

7,690 2.15 85.99 7,690 85.99

The Company recorded no compensation expense relating to outstanding options in general and administrative expense for the years ended December 31, 2024, 2023 and 2022.

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At December 31, 2024, there was no unrecognized compensation expense related to non-vested stock options under the Plan.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

Common Stock Granted to Employees and Directors

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The fair value of common stock awards is determined based on the closing trading price of the Company’s common stock on the grant date.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

A summary of the Company’s employee and director share grant activity is as follows:

A summary of the Company’s employee and director stock grant activity is as follows:

Restricted Stock Grants Shares Weighted-Average Grant-Date Fair Value

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Released ( 86,781 ) 112.31

Cancelled ( 12,808 ) 113.89

Canceled ( 10,614 ) 147.03

Unreleased at December 31, 2022 208,060 $ 158.38

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Released ( 90,662 ) 147.21

Cancelled ( 10,614 ) 147.03

Canceled ( 10,084 ) 165.36

Unreleased at December 31, 2023 205,577 $ 162.81

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Released ( 93,453 ) 153.78

Cancelled ( 10,084 ) 165.36

Canceled ( 6,365 ) 155.37

Unreleased at December 31, 2024 248,083 $ 157.84

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A summary of the PSU activity is as follows:

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

Performance-Based Stock Units Units Weighted-Average Grant-Date Fair Value

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Unvested at December 31, 2024 263,163 $ 162.17

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

The Company recorded $ 12,183 , $ 12,433 and $ 9,299 of expense in general and administrative expense in its statement of operations related to PSUs granted to employees for the years ended December 31, 2024, 2023 and 2022, respectively.

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Term over which compensation cost recognized (in years) 3 3 3

Under the terms of the PSUs, dividends for the entire measurement period are paid in cash when the shares are released, so a dividend yield of zero was used.

Under the terms of the PSUs, dividends for the entire measurement period are paid in cash when the shares are released, therefore, a dividend yield of zero was used.

The valuation model applied in this calculation utilizes subjective assumptions that could potentially change over time, including the probabilities associated with achieving the FFO Targets (categorized within Level 3 of the fair value hierarchy).

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federal corporate income tax and may be subject to state and local income taxes.

The Company accounts for income taxes in accordance with the provisions of ASC 740, “Income Taxes.” Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities.

The Company has elected to use the Tax-Law-Ordering approach to determine when excess tax benefits will be realized.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act (“IRA”).

The provisions include the new Corporate Alternative Minimum Tax (“CAMT”), an excise tax on stock buybacks, and significant tax incentives for energy and climate initiatives, and all of these provisions were effective for tax year 2023.

The Company has evaluated the impact of these provisions and does not expect the enactment of these provisions to have a material impact on the Company's consolidated financial statements.

The Company accounts for income taxes in accordance with the provisions of ASC 740, “Income Taxes.” Deferred tax assets and liabilities are determined based on differences between

EXTRA SPACE STORAGE INC.

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Amounts in thousands, except store and share data, unless otherwise stated

financial reporting and tax bases of assets and liabilities.

The Company has elected to use the Tax-Law-Ordering approach to determine when excess tax benefits will be realized.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act (“IRA”).

The provisions include the new Corporate Alternative Minimum Tax (“CAMT”) and an excise tax on stock buybacks, each effective beginning in tax year 2023, as well as significant tax incentives for energy and climate initiatives.

The Company has evaluated the impact of these provisions and does not expect the enactment of these provisions to have a material impact on the Company's consolidated financial statements.

The income tax provision for the years ended December 31, 2024, 2023 and 2022, is comprised of the following components:

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State deferred taxes ( 7,304 ) ( 4,564 )

Captive insurance subsidiary ( 10,760 ) —

Total deferred tax liabilities ( 62,548 ) ( 58,764 )

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Operating and Finance lease liabilities 9,249 9,013

Other 1,539 502

State deferred taxes 643 2,581

Total deferred tax assets 21,533 19,581

Valuation allowance — ( 1,148 )

Net deferred income tax liabilities $ ( 41,015 ) $ ( 39,183 )

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(1) self-storage operations and (2) tenant reinsurance.

NOI for self-storage operations represents total property revenue less direct property operating expenses.

NOI for tenant reinsurance represents tenant reinsurance revenues less tenant reinsurance expense.

The self-storage operations activities include rental operations of wholly-owned stores and Bargold.

The Company's consolidated revenues equal total segment revenues plus property management fees and other income.

NOI for the Company's self-storage operations represents total property revenue less direct property operating expenses.

NOI for the Company's tenant reinsurance segment represents tenant reinsurance revenue less tenant reinsurance expenses.

The Company's consolidated revenues equal total segment revenues plus management fees and other income.

The self-storage operations activities include rental operations of wholly-owned stores and self-storage units acquired in the Bargold transaction on June 1, 2022.

Tenant reinsurance activities include the reinsurance of risks relating to the loss of goods stored by tenants in the stores operated by the Company.

Excluded from segment revenues and net operating income is property management fees and other income.

For all periods presented, substantially all real estate assets, intangible assets, other assets, and accrued and other liabilities are associated with the self-storage operations segment.

Excluded from segment revenues and net operating income is management fees and other income.

The Chief Executive Officer (“CEO”) is the primary CODM for self-storage operations, and the Chief Financial Officer (“CFO”) is the primary CODM for tenant reinsurance.

The CODM for each reportable operating segment regularly reviews NOI to assess the performance of each segment and make decisions about resources to be allocated to each segment.

As part of this process, the CODM approves each operating segment’s budget, determines allocation of funds for capital expenditures, and reviews monthly discrete financial information.

Based on each segment’s budgeted operating revenues and expenses, resources are allocated to each segment, and these budgeted amounts comprising NOI are compared against actual segment performance.

For all periods presented, substantially all of the Company's real estate assets, intangible assets, other assets, and accrued and other liabilities are associated with the self-storage operations segment.

Financial information for the Company’s business segments is set forth below:

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Self-Storage Operations:

Payroll and benefits $ 170,529 $ 127,300 $ 94,005

Marketing 64,146 44,117 26,349

Office expense 123,604 97,621 74,400

Property operating expense 74,498 57,376 38,982

Repairs and maintenance 55,097 38,750 27,834

Property taxes 292,413 212,360 153,558

Insurance 32,892 25,466 14,636

Other segment items (1)

18,387 9,046 5,578

Total self-storage operations expenses 831,566 612,036 435,342

Tenant Reinsurance:

Tenant reinsurance expense and other segment items (2)

$ 73,886 $ 58,874 $ 33,560

Total segment operating expenses $ 905,452 $ 670,910 $ 468,902

4 unchanged sentences

$ 2,230,595 $ 1,787,348 $ 1,371,364

Total segment net operating income $ 1,787,348 $ 1,371,364 $ 1,113,002

Other components of net income:

Property management fees and other income 101,986 83,904 66,264

Management fees and other income 120,855 101,986 83,904

Transaction costs — — ( 1,548 )

2 unchanged sentences

Depreciation and amortization expense ( 783,023 ) ( 506,053 ) ( 288,316 )

Gain on real estate transactions — 14,249 140,760

Gain (loss) on real estate assets held for sale and sold, net ( 25,906 ) — 14,249

Impairment of Life Storage trade name ( 51,763 ) — —

Interest expense ( 551,354 ) ( 419,035 ) ( 219,171 )

Non-cash interest expense related to amortization of discount on equity component of exchangeable senior notes ( 18,786 ) — —

Non-cash interest expense related to amortization of discount on Life Storage unsecured senior notes ( 43,720 ) ( 18,786 ) —

Interest income 124,422 84,857 69,422

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Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets 13,730 — —

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

Income tax expense ( 33,478 ) ( 21,559 ) ( 20,925 )

Net income $ 900,232 $ 850,453 $ 921,156

(1) Other segment items for the Self-Storage Operations segment include miscellaneous items such as legal and professional fees, capital expenditures, taxes, and casualty losses.

(2) Tenant reinsurance expense and other segment items for the Tenant Reinsurance segment includes claims expense, acquisition costs, claims service fees and miscellaneous administrative items.

COMMITMENTS AND CONTINGENCIES

As of December 31, 2023, the Company was under agreement to acquire 8 stores at a total purchase price of $ 73,811 .

Eight stores are scheduled to close in 2024 and none are scheduled to close in 2025.

Additionally, the Company is under agreement to acquire two stores in 2024 with joint venture partners, for a total investment of $ 2,764 .

The Company is involved in various legal proceedings and is subject to various claims and complaints arising in the ordinary course of business.

As of December 31, 2024, the Company was under agreement to acquire eight stores at a total purchase price of $ 81,533 .

Acquisitions of all eight stores are scheduled to close in 2025.

As of December 31, 2024, the Company was under contract to sell 13 stores at a total sales price of $ 144,550 .

The sales of all 13 stores are scheduled to close in 2025.

As of December 31, 2024, the Company was under agreement to originate $ 245,995 in bridge loans in 2025.

As of December 31, 2024, the Company was involved in various legal proceedings and was subject to various claims and complaints arising in the ordinary course of business.

Because litigation is inherently unpredictable, the outcome of these matters cannot presently be determined with any degree of certainty.

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In such cases, there may be an exposure to loss in excess of any amounts accrued.

The estimated loss, if any, is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known and unknown

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts in thousands, except store and share data, unless otherwise stated

uncertainties.

The Company could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period, notwithstanding the fact that the Company is currently vigorously defending any legal proceedings against it.

As of December 31, 2023, the Company was involved in various legal proceedings and was subject to various claims and complaints arising in the ordinary course of business.

The estimated loss, if any, is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known and unknown uncertainties.

The Company could incur judgments or enter into settlements of claims in the future that could have a material adverse effect on its results of operations in any particular period, notwithstanding the fact that the Company is currently vigorously defending any legal proceedings against it.

In the opinion of management, such litigation, claims and complaints are not expected to have a material adverse effect on the Company’s financial condition or results of operations.

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Net non-lease real estate assets (1)

$ 24,587,627 $ 24,555,873 $ 9,997,978

(1) No right-of-use assets related to operating leases are included in the ending net real estate assets information above.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data