Extra Space Storage (EXR) 10-K risk factor changes: FY2018 vs FY2017

We may not be successful in identifying suitable stores or other assets that meet our acquisition criteria or in consummating acquisitions [added: or investments on satisfactory terms or at all.]

While, to date, we have not experienced a [added: material] security breach, this risk has generally increased as the number, intensity and sophistication of such breaches and attempted breaches from around the world have increased.

In addition, our Operating Partnership is required to indemnify us, our affiliates and each of our respective trustees, officers, directors, employees and agents to the fullest extent permitted by applicable law against any and all losses, claims, damages, liabilities (whether joint or several), expenses (including, without limitation, attorneys’ fees and other legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or [added: proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Operating Partnership, provided that our Operating Partnership will not indemnify for (1) willful misconduct or a knowing violation of the law, (2) any transaction for which such person received an improper personal benefit in violation or breach of any provision of the partnership agreement, or (3) in the case of a criminal proceeding, the person had reasonable cause to believe the act or omission was unlawful.]

As of December 31, [removed: 2017,] [added: 2018,] we held interests in [removed: 215] [added: 233] operating stores through joint ventures.

As of December 31, [removed: 2017,] [added: 2018,] we had approximately [removed: $4.6] [added: $4.9] billion of outstanding indebtedness.

Increases in interest rates may increase our interest expense and adversely affect our cash flow and our ability to service [added: our indebtedness and make cash distributions to our stockholders.]

As of December 31, [removed: 2017,] [added: 2018,] we had approximately [removed: $4.6] [added: $4.9] billion of debt outstanding, of which approximately [removed: $1.2] [added: $1.3] billion, or [removed: 25.3%] [added: 25.9%] was subject to variable interest rates (excluding debt with interest rate swaps).

This variable rate debt had a weighted average interest rate of approximately [removed: 3.1%] [added: 3.9%] per annum.

Dividends paid by REITs to such stockholders are generally not eligible for that rate, but under the 2017 Tax Legislation (defined below), such stockholders may deduct up to 20% of ordinary dividends [added: (i.e., dividends not designated as capital gain dividends or qualified dividend income)] from a REIT for taxable years beginning after December 31, 2017 and before January 1, 2026.

Although this deduction reduces the effective tax rate applicable to certain dividends paid by REITs, such tax rate may still [added: be] higher than the tax rate applicable to regular corporate qualified dividends.

The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the [removed: IRS] [added: Internal Revenue Service ("IRS")] and the U.S. Department of the Treasury.

[removed: Recently enacted U.S.] [added: The federal] tax legislation [added: enacted in December 2017, commonly known as the Tax Cuts and Jobs Act] (the “2017 Tax [removed: Legislation”)] [added: Legislation”),] has significantly changed the U.S. federal income taxation of U.S. businesses and their owners, including REITs and their stockholders.

Many of these changes [added: that] are [added: applicable to us are] effective [removed: immediately,] [added: beginning with our 2018 taxable year,] without any transition periods or grandfathering for existing transactions.

The legislation [removed: is] [added: was] unclear in many respects and could [added: still] be subject to potential amendments and technical corrections, as well as interpretations and implementing regulations by the Treasury and IRS, any of which could lessen or increase the impact of the legislation.

In addition, it is [added: still] unclear how these U.S. federal income tax changes [removed: will] [added: could] affect state and local taxation, which often uses federal taxable income as a starting point for computing state and local tax liabilities.

While some of the changes made by the tax legislation may adversely affect us in one [removed: or more reporting periods and prospectively, other changes may be beneficial on a going forward basis.]

We [removed: are continuing] [added: continue] to work with our tax advisors to determine the full impact that the [removed: recent federal tax reform legislation, which we refer to herein as the] 2017 Tax [removed: Legislations,] [added: Legislation] as a whole will have on us.

| • | we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to U.S. federal corporate income tax on our [added: taxable] income; |

We have not requested and do not plan to request a ruling from the [removed: Internal Revenue Service] [added: IRS] regarding our qualification as a REIT.

or more reporting periods and prospectively, other changes may be beneficial in the future.

A TRS is subject to U.S. federal corporate income tax on its taxable income.

or investments on satisfactory terms or at all.

proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Operating Partnership, provided that our Operating Partnership will not indemnify for (1) willful misconduct or a knowing violation of the law, (2) any transaction for which such person received an improper personal benefit in violation or breach of any provision of the partnership agreement, or (3) in the case of a criminal proceeding, the person had reasonable cause to believe the act or omission was unlawful.

our indebtedness and make cash distributions to our stockholders.

A TRS is a fully taxable corporation, and may be limited in its ability to deduct interest payments made to us.

For a discussion of such risk factors, see the section in this Form 10-K entitled “Risk Factors.” [removed: Amounts] [added: Dollar amounts] in thousands, except share and per share data.

Consequently, management spends a significant portion of their time maximizing [removed: cash flows from our diverse portfolio of stores.]

Revenue from our tenant reinsurance segment consists of insurance revenues from the reinsurance of risks relating to the loss of goods stored by tenants in [removed: the Company's] [added: our] stores.

As of December 31, [removed: 2017,] [added: 2018,] we had no consolidated VIEs.

Additionally, our Operating Partnership has notes payable to [removed: three trusts] [added: one trust] that [removed: are] [added: is] considered [removed: VIEs.][added: a VIE.]

Since the Operating Partnership is not the primary beneficiary of the [removed: trusts, these VIEs are] [added: trust, this VIE is] not consolidated.

These assumptions and estimates require judgment, and therefore others could come to materially different conclusions as to the estimated fair values, which could result in differences in depreciation and amortization expense, gains and losses on the [removed: purchase and] sale of real estate assets, and real estate and intangible asset values.

For these stores, we determine whether the decrease is temporary or permanent and whether the store will [removed: likely recover the lost occupancy and/or revenue in the short term.]

No material impairments were recorded in the year ended December 31, [removed: 2017.][added: 2018.]

For any taxable year that we fail to qualify as a REIT and for which applicable statutory relief provisions did not apply, we would be subject to federal corporate income tax on all of our [added: taxable income for at least that year and the ensuing four years.]

If tax authorities determine that amounts paid by our [removed: taxable REIT subsidiaries] [added: TRS] to us are not reasonable compared to similar arrangements among unrelated parties, we could be subject to a penalty tax on the excess payments.

Comparison of the Year Ended December 31, [removed: 2017] [added: 2018] to the Year Ended December 31, [removed: 2016][added: 2017]

[removed:  ][added: ]

[added: Property rental revenue also increased] by $40,439 during the year ended December 31, 2017 as a result of increases in rental rates to new and existing customers at our stabilized stores.

The change [removed: is] [added: was] due primarily to the increase in the number of stores we owned and/or [removed: managed.][added: managed and an increase in the overall average payout on claims.]

Accordingly, closing and other [removed: transactions] [added: transaction] costs have been capitalized in 2017 as part of the acquisition price for asset acquisitions, rather than being expensed as incurred.

| Gain [removed: (loss)] on real estate transactions, earnout [removed: from] [added: on] prior acquisitions and impairment of real estate | $ | 112,789 | | | $ | 8,465 | | | $ | 104,324 | | | 1,232.4 | % |

Gain [removed: (Loss)] on Real Estate Transactions, Earnout [removed: from] [added: on] Prior [removed: Acquisitions] [added: Acquisitions,] and Impairment of Real Estate— During the year ended December 31, 2017, we sold 36 stores to a new joint venture with an existing partner.

Interest Expense—The increase in interest expense during the year ended December 31, 2017 was primarily the result of higher debt balances when compared to the prior year as well as [removed: the] [added: an] increase in our average interest rate.

Interest Income—Interest income represents amounts earned on cash and cash equivalents deposited with financial institutions and interest earned on notes [removed: receivable.][added: receivable and income earned on notes receivable from preferred and common Operating Partnership unit holders.]

[removed: We acquired 11 stores from] the ESS WCOT LLC joint venture ("WCOT") in a step acquisition.

Comparison of the Year Ended December 31, [removed: 2016] [added: 2018] to the Year Ended December 31, [removed: 2015][added: 2017]

[removed:  ][added: ]

Results for the year ended December 31, [removed: 2016,] [added: 2018] included the operations of [removed: 1,016] [added: 1,111] stores [removed: (836] [added: (878] wholly-owned, [removed: one] [added: four] in [removed: a] consolidated joint [removed: venture,] [added: ventures,] and [removed: 179] [added: 229] in joint ventures accounted for using the equity method) compared to the results for the year ended December 31, [removed: 2015,] [added: 2017,] which included the operations of [removed: 999] [added: 1,061] stores [removed: (746] [added: (846] wholly-owned, one in a consolidated joint venture, and [removed: 252] [added: 214] in joint ventures accounted for using the equity method).

| | [removed: 2016 | | | | 2015] [added: 2017] | | | | [removed: $ Change] [added: 2016] | | | | [removed: %] Change | [removed: |]

| Management [removed: fees and] [added: fees,] other income [removed: | 39,842 | | | | 34,161 | |] [added: and interest income] | [added: (47,049] | [removed: 5,681] | [added: )] | | [added: (46,115] | [removed: 16.6] | [removed: %] [added: )] |

Property Rental—The increase in property rental revenues for the year ended December 31, [removed: 2016] [added: 2018] was primarily the result of an increase of [removed: $144,985] [added: $57,827] associated with acquisitions completed in [removed: 2016] [added: 2018] and [removed: 2015.][added: 2017.]

We acquired [removed: 99] [added: 34] stores [added: and opened three new development stores] during the year ended December 31, [removed: 2016] [added: 2018,] and [removed: 171] [added: acquired 46] stores during the year ended December 31, [removed: 2015.][added: 2017.]

Property rental revenue also increased by [removed: $42,171] [added: $36,797] during the year ended December 31, [removed: 2016] [added: 2018] as a result of increases in rental rates to new and existing customers at our stabilized stores.

Tenant Reinsurance—The increase in tenant reinsurance revenues was [removed: primarily] due [added: primarily] to [removed: the] [added: an] increase in stores [removed: operated.][added: operated, as well as an increase in the average tenant insured value per policy.]

| Acquisition related costs and [removed: other | 12,111 | | | | 69,401 | |] [added: other2] | [added: —] | [removed: (57,290] | | [removed: )] | [added: 12,111] | [removed: (82.5] | [removed: )%] |

| General and administrative | [removed: 81,806 | | | | 67,758 | | |] [added: 78,961] | [removed: 14,048] | | | [added: 81,806] | [removed: 20.7] | [removed: %] |

| Depreciation and amortization | [removed: 182,560 | | | | 133,457 | | |] [added: 193,296] | [removed: 49,103] | | | [added: 182,560] | [removed: 36.8] | [removed: %] |

Property Operations—The increase in property operations expense consists primarily of an increase of [removed: $45,055] [added: $19,541] related to acquisitions completed in [removed: 2016] [added: 2018] and [removed: 2015.][added: 2017.]

We acquired [removed: 99 operating] [added: 34] stores [added: and opened three new development stores] during the year ended December 31, [removed: 2016] [added: 2018,] and [removed: 171] [added: acquired 46 operating] stores during the year ended December 31, [removed: 2015.][added: 2017.]

General and Administrative—General and administrative expenses primarily include all expenses not [added: directly] related to our stores, including corporate payroll, travel and professional fees.

[removed: The] [added: These] expenses are recognized as incurred.

We did not observe any material trends [added: in] specific [removed: to] payroll, travel or other [removed: expense] [added: expenses] that contributed significantly to the increase in general and administrative expenses apart from the increase due to the management of additional stores.

We acquired [removed: 99 operating] [added: 34] stores [added: and opened three new development stores] during the year ended December 31, [removed: 2016,] [added: 2018] and [removed: 171 operating] [added: acquired 46] stores during the year ended December 31, [removed: 2015.][added: 2017.]

| Gain [removed: (loss)] on real estate transactions, earnout from prior [removed: acquisitions] [added: acquisition] and impairment of real estate | [removed: $ | 8,465 | | | $ | 1,501 | |] [added: (112,789] | [removed: $] | [removed: 6,964] [added: )] | | [added: (8,465] | [removed: 464.0] | [removed: %] [added: )] |

cash flows from our diverse portfolio of stores.

likely recover the lost occupancy and/or revenue in the short term.

| Property rental | $ | 1,039,340 | | | $ | 967,229 | | | $ | 72,111 | | | 7.5 | % |

| Tenant reinsurance | 115,507 | | | | 98,401 | | | | 17,106 | | | | 17.4 | % |

| Management fees and other income | 41,757 | | | | 39,379 | | | | 2,378 | | | | 6.0 | % |

| Total revenues | $ | 1,196,604 | | | $ | 1,105,009 | | | $ | 91,595 | | | 8.3 | % |

These increases were partially offset by a decrease of $26,313 from the sale of 36 stores during the year ended December 31, 2017 to a new joint venture with an existing partner.

We sold one additional store during the year ended December 31, 2018.

We operated 1,647 stores at December 31, 2018, compared to 1,483 stores at December 31, 2017.

| | 2018 | | | | 2017 | | | | $ Change | | | | % Change | |

| Property operations | $ | 291,695 | | | $ | 271,974 | | | $ | 19,721 | | | 7.3 | % |

| Tenant reinsurance | 25,707 | | | | 19,173 | | | | 6,534 | | | | 34.1 | % |

| Depreciation and amortization | 209,050 | | | | 193,296 | | | | 15,754 | | | | 8.2 | % |

| Total expenses | $ | 607,708 | | | $ | 563,404 | | | $ | 44,304 | | | 7.9 | % |

There was also an increase of $7,495 related to increases in expenses at stabilized stores.

These increases were partially offset by a decrease of $8,282 due to property sales.

| | 2018 | | | | 2017 | | | | $ Change | | | | % Change | |

| Gain on real estate transactions, earnout on prior acquisitions and impairment of real estate | $ | 30,807 | | | $ | 112,789 | | | $ | (81,982 | ) | | (72.7 | )% |

| Interest expense | (178,436 | | ) | | (153,511 | | ) | | (24,925 | | ) | | 16.2 | % |

| Interest income | 5,292 | | | | 6,736 | | | | (1,444 | | ) | | (21.4 | )% |

| Income tax expense | (9,244 | | ) | | (3,625 | | ) | | (5,619 | | ) | | 155.0 | % |

| Total other expense, net | $ | (141,816 | ) | | $ | (27,383 | ) | | $ | (114,433 | ) | | 417.9 | % |

We own a 10% ownership interest in the new joint venture.

During the year ended December 31, 2017, we also recognized an impairment loss of $6,100 related to three parcels of undeveloped land where the carrying values were greater than the fair values.

Our average interest rate for fixed and variable rate debt as of December 31, 2018 was 3.5% compared to 3.3% at December 31, 2017.

The decrease is related to the repayment in July 2018 of our outstanding exchangeable senior notes due 2013.

In these joint ventures, we and our joint venture partners generally receive a preferred return on our invested capital.

To the extent that cash or profits in excess of these preferred returns are generated, we receive a higher percentage of the excess cash or profits, as applicable.

Income Tax Expense— The increase in income tax expense relates primarily to the remeasurement of our deferred tax liability balance and valuation allowance during the year ended December 31, 2017 as a result of the 2017 Tax Legislation.

No similar remeasurement was recorded during the year ended December 31, 2018.

Tax expense was recognized at 21% for the year ended December 31, 2018 as opposed to 35% in the prior year.

We also generated tax credits from our solar program in the amount of $5,629 in 2018.

| Interest income | 6,736 | | | | 10,998 | | | | (4,262 | | ) | | (38.8 | )% |

| | | | | | | | | | | | | | | |

We have a 10% ownership interest in the new joint venture.

We recognized a total gain of $118,776 related to this transaction.

Interest Income—Interest income represents amounts earned on cash and cash equivalents deposited with financial institutions and interest earned on notes receivable and income earned on notes receivable from preferred and common Operating Partnership unit holders.

We acquired 11 stores from

The tax benefit recorded from this remeasurement was $8,606 for the year ended December 31, 2017.

| | | | | | | | | | |

Our segment presentation has changed from the prior year, and all applicable information has been reclassified to conform to the current year's segment presentation.

Any ineffective portion of a derivative financial instrument's change in fair value is immediately recognized in earnings.

taxable income for at least that year and the ensuing four years.

Property rental revenue also increased

| Interest income | 3,801 | | | | 6,148 | | | | (2,347 | | ) | | (38.2 | )% |

| Interest income on note receivable from Preferred Operating Partnership unit holder | 2,935 | | | | 4,850 | | | | (1,915 | | ) | | (39.5 | )% |

We recognized a total gain of $11,358 related to these dispositions.

As the operating income of these stores during the earnout period was higher than originally estimated, an additional payment was due to the sellers of $4,284, which was recorded as a loss during 2016.

Interest Income on Note Receivable from Preferred Operating Partnership Unit Holder—Represents interest on a $100,000 loan to the holder of the Operating Partnership’s Series A Participating Redeemable Preferred Units (the “Series A Units”).

We recorded a gain of $4,651 as a result of the transaction.

| Property rental | $ | 864,742 | | | $ | 676,138 | | | $ | 188,604 | | | 27.9 | % |

| Tenant reinsurance | 87,291 | | | | 71,971 | | | | 15,320 | | | | 21.3 | % |

| Total revenues | $ | 991,875 | | | $ | 782,270 | | | $ | 209,605 | | | 26.8 | % |

We operated 1,427 stores at December 31, 2016, compared to 1,347 stores at December 31, 2015.

| Property operations | $ | 250,005 | | | $ | 203,965 | | | $ | 46,040 | | | 22.6 | % |

| Tenant reinsurance | 15,555 | | | | 13,033 | | | | 2,522 | | | | 19.4 | % |

| Total expenses | $ | 542,037 | | | $ | 487,614 | | | $ | 54,423 | | | 11.2 | % |

Acquisition Related Costs and Other—For the years ended December 31, 2016 and 2015, acquisition related costs represented closing and other transaction costs incurred in connection with our acquisition of operating stores, which were accounted for as business combinations.

These costs relate primarily to acquisition activities during the periods indicated.

The decrease in these expenses for the year ended December 31, 2016 compared to the prior year was due to a decrease in the number of acquisitions.

We acquired 99 properties during the year ended December 31, 2016 compared to 171 during the prior year.

Included in the acquisitions completed in 2015 was the acquisition of SmartStop Self Storage Inc. ("SmartStop") on October 1, 2015.

As part of this acquisition, we recorded an expense of $63,121 related to defeasance costs, prepayment penalties, and other acquisition related costs.

General and administrative expense for the year ended December 31, 2016 increased when compared to the same periods in the prior year primarily due to the overall cost associated with the management of additional stores.

| Interest expense | (133,479 | | ) | | (95,682 | | ) | | (37,797 | | ) | | 39.5 | % |

| Interest income | 6,148 | | | | 3,461 | | | | 2,687 | | | | 77.6 | % |

| Interest income on note receivable from Preferred Operating Partnership unit holder | 4,850 | | | | 4,850 | | | | — | | | | — | % |

| Total other expense, net | $ | (52,749 | ) | | $ | (85,120 | ) | | $ | 32,371 | | | (38.0 | )% |

During 2014, we acquired a portfolio of five stores where we agreed to make an additional cash payment to the sellers if the acquired stores exceeded a specified amount of net operating income for the years ending December 31, 2015 and 2016.

In 2011, we acquired a single store in Florida.

As part of the acquisition, we agreed to make an additional cash payment to the sellers if the acquired store exceeded a specified amount of net rental income for the period of 12 consecutive months ending June 30, 2015.

During 2014, we recorded a liability of $2,500 as an estimate of the payment that would become due.

The $400 gain recorded during 2015 represents the adjustment needed to true up the existing liability to the amount owed to the sellers as of June 30, 2015.

During 2015, we determined that one of our acquisitions was purchased at below its market value, and therefore recorded a $1,101 gain at the time of the acquisition, which represents the excess of the fair value of the store acquired over the consideration paid.

Equity in Earnings of Unconsolidated Real Estate Ventures—Gain on Sale of Real Estate Assets and Purchase of Joint Venture Partners’ Interests— In 2016 we had several large transactions with our joint venture partners.

We acquired 11 stores from our WCOT joint venture in a step acquisition.

Similarly, we acquired 23 stores from our PRISA II joint venture in a separate step acquisition and recorded a gain of $6,778 on the transaction.

Immediately after the step acquisition, we sold our interest in the PRISA II joint venture , which still owned 42 properties, to our joint venture partners, and recognized a gain of $30,846.

Lastly, we acquired six stores from our VRS joint venture in a step acquisition, where we again recorded a gain of $26,923.

During March 2015, one of our joint ventures sold a store located in New York to a third party and we recorded a gain of $1,228 on the transaction.

As of December 31, [removed: 2017,] [added: 2018,] we had approximately [removed: $4.6] [added: $4.9] billion in total face value debt, of which approximately [removed: $1.2] [added: $1.3] billion was subject to variable interest rates (excluding debt with interest rate swaps).

If LIBOR were to increase or decrease by 100 basis points, the increase or decrease in interest expense on the variable rate debt would increase or decrease future earnings and cash flows by approximately [removed: $11.6] [added: $12.6] million annually.

As of December 31, [removed: 2017] [added: 2018] we owned and/or operated [removed: 1,483] [added: 1,647] stores in 39 states, Washington, D.C. and Puerto Rico, comprising approximately [removed: 112] [added: 125.7] million square feet of net rentable space in approximately [removed: 1,020,000] [added: 1.2 million] units.

Tenant reinsurance activities include the reinsurance of risks relating to the loss of goods stored by tenants in [removed: the Company’s] [added: our] stores.

You may obtain copies of these documents by visiting the SEC’s [removed: Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, by calling the SEC at 1-800-SEC-0330 or by accessing the SEC’s] website at www.sec.gov.

Margolis, Chief Executive Officer, [removed: 13] [added: 14] years; Scott Stubbs, Executive Vice President and Chief Financial Officer, [removed: 17] [added: 18] years; Samrat Sondhi, Executive Vice President and Chief Operating Officer, [removed: 14] [added: 15] years; Gwyn McNeal, Executive Vice President and Chief Legal Officer, [removed: 12] [added: 13] years; James Overturf, Executive Vice President and Chief Marketing Officer, [removed: 19 years; and Kenneth M.][added: 20 years.]

Our executive management team and board of directors have an ownership position in the Company with executive officers and directors owning approximately [removed: 4,059,669] [added: 4,120,722] shares or 3.2% of our outstanding common stock as of February [removed: 21, 2018.][added: 19, 2019.]

Items that tenants place in self-storage are typically furniture, household items [removed: and appliances.]

A store’s price, perceived security, cleanliness, and the general professionalism of the [removed: site] [added: store] managers and staff are also contributing factors to a [removed: site’s] [added: store’s] ability to successfully secure rentals.

According to the Self-Storage Almanac (the “Almanac”), in [removed: 2012,] [added: 2013,] the national average physical occupancy rate was [removed: 85.0%] [added: 87.8%] of net rentable square feet, compared to an average physical occupancy rate of [removed: 92.8%] [added: 91.7%] in [removed: 2017.][added: 2018.]

According to the Almanac, as of the end of [removed: 2017,] [added: 2018,] the top ten self-storage companies in the United States operated approximately [removed: 15.8%] [added: 15.2%] of the total U.S. stores, and the top 50 self-storage companies operated approximately [removed: 19.2%] [added: 18.4%] of the total U.S. stores.

We are one of five public self-storage REITs along with CubeSmart, [removed: National Storage Affiliates,] Life [added: Storage, National] Storage [added: Affiliates] and Public Storage.

Acquire [removed: self storage] [added: self-storage] stores

In addition to the pursuit of stabilized stores, we [removed: also] develop stores from the ground up and provide the construction capital.

We are typically able to acquire these assets at a lower price than a stabilized store, and expect greater long term [removed: returns on these stores on average.]

We expect that this trend will continue in [removed: 2018] [added: 2019] as we continue to acquire Certificate of Occupancy stores.

We plan to finance future acquisitions through a diverse capital optimization strategy which includes but is not limited to: cash generated from operations, borrowings under our revolving lines of credit (the "Credit Lines"), secured and unsecured financing, equity offerings, joint ventures and [added: the] sale of [removed: properties.][added: stores.]

As of December 31, [removed: 2017,] [added: 2018,] our Credit Lines had available capacity of [removed: $600.0] [added: $790.0] million, of which [removed: $506.0] [added: $709.0] million was undrawn.

Secured and Unsecured Debt - Historically, we [removed: have] [added: had] primarily used traditional secured mortgage loans to finance store acquisitions and development efforts.

More recently, we [removed: obtained] [added: obtain] unsecured bank term loans and [removed: issued] [added: issue] unsecured private placement bonds.

As of December 31, [removed: 2017,] [added: 2018,] we had [removed: $2.8] [added: $2.9] billion of secured notes payable and [removed: $1.7] [added: $1.9] billion of unsecured notes payable outstanding compared to [removed: $2.9] [added: $2.8] billion [added: of] secured notes payable and [removed: $1.0] [added: $1.7] billion [added: of] unsecured notes payable outstanding as of December 31, [removed: 2016.][added: 2017.]

During the year ended December 31, [removed: 2016,] [added: 2018,] we issued [removed: 1,381,300] [added: 933,789] shares of common stock through our ATM program and received [added: net] proceeds of approximately [removed: $123.4] [added: $90.5] million.

We view equity interests in our Operating Partnership as [removed: a potential] [added: another] source of capital that can [removed: also] provide [added: an] attractive tax planning [removed: opportunities] [added: opportunity] to sellers of real estate.

Joint Venture Financing - As of December 31, [removed: 2017,] [added: 2018,] we owned [removed: 215] [added: 233] of our stores through joint ventures with third parties.

We generally manage the day-to-day operations of the stores owned in these joint ventures and have the right to participate in major decisions relating to sales of stores or financings by the applicable joint [removed: venture.][added: venture, but do not control the joint ventures.]

For the years ended December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] we sold [added: one store to a third party for approximately $40.2 million and] 36 stores [removed: into] [added: to] a [added: new] joint venture [removed: and nine stores to] [added: with] an [removed: outside party, respectively,] [added: existing partner] for [removed: approximately] $295.0 [removed: million and $30.3 million.][added: million, respectively.]

As of December 31, [removed: 2017,] [added: 2018,] we had [removed: 3,380] [added: 3,624] employees and believe our relationship with our employees is good.

and appliances.

returns on these stores on average.

We previously reported our financial statements in three segments, but based on operational changes and the way our management reviews company performance, we realigned our financial statements into two reportable segments.

Woolley, Executive Chairman, 39 years.

For the fiscal year ended December 31, [removed: 2017][added: 2018]

| Title of [removed: Each Class] [added: each class] | | Name of [added: each] exchange on which registered |

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or [removed: Section] 15(d) of the Act.

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Web site, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment [removed: of] [added: to] this Form 10-K.

| Non-accelerated filer | | o [removed: (Do not check if a smaller reporting company)] | | Smaller reporting company | | o |

The aggregate market value of the common stock held by non-affiliates of the registrant was [removed: $9,468,562,974] [added: $12,155,910,603] based upon the closing price on the New York Stock Exchange on June [removed: 30, 2017,] [added: 29, 2018,] the last business day of the registrant’s most recently completed second fiscal quarter.

The number of shares outstanding of the registrant’s common stock, $0.01 par value per share, as of February [removed: 21, 2018] [added: 19, 2019] was [removed: 126,037,528.][added: 127,298,501.]

Portions of the registrant’s definitive proxy statement to be issued in connection with the registrant’s annual stockholders’ meeting to be held in [removed: 2018] [added: 2019] are incorporated by reference into Part III of this Annual Report on Form 10-K.

For the Year Ended December 31, [removed: 2017][added: 2018]

| Item 1. | [removed: [Business](#s6A1C90C7799056F0946F1D09A9FDCD22)] [added: [Business](#s2BB72195B00752DAA7637BA3EFEC685D)] | [removed: [4](#s6A1C90C7799056F0946F1D09A9FDCD22)] [added: [4](#s2BB72195B00752DAA7637BA3EFEC685D)] |

| Item 1A. | [Risk [removed: Factors](#s5E8BA569AEF057208A1CCC0C80019A24)] [added: Factors](#s6FD1305DF2EF523190E608E63EC99386)] | [removed: [7](#s5E8BA569AEF057208A1CCC0C80019A24)] [added: [7](#s6FD1305DF2EF523190E608E63EC99386)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#s45B24144CD8555EF9A45DD136B98AC1A)] [added: Comments](#s6F20C32809885DD68E52455F8D3E8842)] | [removed: [14](#s45B24144CD8555EF9A45DD136B98AC1A)] [added: [14](#s6F20C32809885DD68E52455F8D3E8842)] |

| Item 2. | [removed: [Properties](#sB8447985380F5D4793AEFECD0DD3D9AB)] [added: [Properties](#s8F81D3EB214C5A858B4E5EB9847AB71B)] | [removed: [14](#sB8447985380F5D4793AEFECD0DD3D9AB)] [added: [14](#s8F81D3EB214C5A858B4E5EB9847AB71B)] |

| Item 3. | [Legal [removed: Proceedings](#sDB93F103CE0D578AB22DE38D3769EA08)] [added: Proceedings](#sB893E94CF3E75E5A8CEDFC454BC381F4)] | [removed: [15](#sDB93F103CE0D578AB22DE38D3769EA08)] [added: [15](#sB893E94CF3E75E5A8CEDFC454BC381F4)] |

| Item 4. | [Mine Safety [removed: Disclosures](#s299B17993BC25AD0AD6881883B396D60)] [added: Disclosures](#s49605C9816635627A5F7D64DAD3D5E2F)] | [removed: [15](#s299B17993BC25AD0AD6881883B396D60)] [added: [15](#s49605C9816635627A5F7D64DAD3D5E2F)] |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s5D378572872353868881F5C62F602EB9)] [added: Securities](#s493750157747532AA875753FE54ED546)] | [removed: [15](#s5D378572872353868881F5C62F602EB9)] [added: [15](#s493750157747532AA875753FE54ED546)] |

| Item 6. | [Selected Financial [removed: Data](#sA9E1C520E4DF5D32A7E1AFF50DEBAC44)] [added: Data](#s97CD69E0F84A5C0BAAF47F91B8B464A4)] | [removed: [16](#sA9E1C520E4DF5D32A7E1AFF50DEBAC44)] [added: [15](#s97CD69E0F84A5C0BAAF47F91B8B464A4)] |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sBBB3C6A201DC5C59860E53E9F024DED9)] [added: Operations](#s1EB700406DF95026BC2407C43E716AA8)] | [removed: [17](#sBBB3C6A201DC5C59860E53E9F024DED9)] [added: [16](#s1EB700406DF95026BC2407C43E716AA8)] |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sBAC0137AB3585720952ACC1D5B791461)] [added: Risk](#s0210EBEB137053818260FFBEF8DF1B57)] | [removed: [31](#sBAC0137AB3585720952ACC1D5B791461)] [added: [29](#s0210EBEB137053818260FFBEF8DF1B57)] |

| Item 8. | [Financial Statements and Supplementary [removed: Data](#s2334B49212C45310A4A17F0E0204C776)] [added: Data](#s085AD6DCA8125155B3069D080E07CD7E)] | [removed: [33](#s2334B49212C45310A4A17F0E0204C776)] [added: [31](#s085AD6DCA8125155B3069D080E07CD7E)] |

| Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sF44C3E50E3BD529FB6D955D43C09D88B)] [added: Disclosure](#sB71BED53BDB650E9AFC21A74A654CE78)] | [removed: [78](#sF44C3E50E3BD529FB6D955D43C09D88B)] [added: [77](#sB71BED53BDB650E9AFC21A74A654CE78)] |

| Item 9A. | [Controls and [removed: Procedures](#s78C6DF5EF831564A8E1A9D990060A1B5)] [added: Procedures](#s9B13802B9CB75C0F927A698E12C4E356)] | [removed: [78](#s78C6DF5EF831564A8E1A9D990060A1B5)] [added: [77](#s9B13802B9CB75C0F927A698E12C4E356)] |

| Item 9B. | [Other [removed: Information](#s63FC11F91AD45C6A93582CD8C9CD811E)] [added: Information](#s742F963197F553F98AB137CDCA04DCED)] | [removed: [79](#s63FC11F91AD45C6A93582CD8C9CD811E)] [added: [78](#s742F963197F553F98AB137CDCA04DCED)] |

| [PART [removed: III](#sC80CF6A855075670A45DDD9D922925A8)] [added: III](#sC714A8CFF46F505FBB2B0EBAD7DF6618)] | | [removed: [80](#sC80CF6A855075670A45DDD9D922925A8)] [added: [79](#sC714A8CFF46F505FBB2B0EBAD7DF6618)] |

| Item 10. | [Directors, Executive Officers and Corporate [removed: Governance](#sA4B0822D87665232A79C8A6DE232324F)] [added: Governance](#s165D56E670D4504A811EDEFB0D0EFEFF)] | [removed: [80](#sA4B0822D87665232A79C8A6DE232324F)] [added: [79](#s165D56E670D4504A811EDEFB0D0EFEFF)] |

| Item 11. | [Executive [removed: Compensation](#sF9E0E5F3599E5B22BC3116FB43F97150)] [added: Compensation](#s1D4B4E89E3DB5BDD8FDB224D4FDABF4B)] | [removed: [80](#sF9E0E5F3599E5B22BC3116FB43F97150)] [added: [79](#s1D4B4E89E3DB5BDD8FDB224D4FDABF4B)] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s5C546AD985E0502189B6E9C455453D65)] [added: Matters](#s9B62E985D7765496B58FBD1173F695BC)] | [removed: [80](#s5C546AD985E0502189B6E9C455453D65)] [added: [79](#s9B62E985D7765496B58FBD1173F695BC)] |

| Item 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#sB2B2200529065DC782CEF6111E3C9AFA)] [added: Independence](#sA1F9F69900495147BA4AEF601C79AF68)] | [removed: [80](#sB2B2200529065DC782CEF6111E3C9AFA)] [added: [79](#sA1F9F69900495147BA4AEF601C79AF68)] |

| Item 14. | [Principal Accounting Fees and [removed: Services](#s7CD4F3FE3B9054279B532DBC44804FC6)] [added: Services](#s2891EFC213F15A56BC8B3BDFEB3EB9C4)] | [removed: [80](#s7CD4F3FE3B9054279B532DBC44804FC6)] [added: [79](#s2891EFC213F15A56BC8B3BDFEB3EB9C4)] |

| Item 15. | [Exhibits and Financial Statement [removed: Schedules](#sBD5C2D6F0289525A8DB8E50BABE60BEC)] [added: Schedules](#s2258D87020DC59B28CA570744D409B6A)] | [removed: [81](#sBD5C2D6F0289525A8DB8E50BABE60BEC)] [added: [80](#s2258D87020DC59B28CA570744D409B6A)] |

10-K 1 q4201810kexrdocument.htm 10-K

| [PART I](#sD212E98760F453909E0F88B01F237C05) | | [4](#sD212E98760F453909E0F88B01F237C05) |

| [PART II](#sD6D2AD922CD056139785E752C3E1B9F2) | | [15](#sD6D2AD922CD056139785E752C3E1B9F2) |

| [PART IV](#s30EF8A2DE8A35752804F807468B60677) | | [80](#s30EF8A2DE8A35752804F807468B60677) |

| [SIGNATURES](#s657F0C4289B0571FA283AD0EC8BA6546) | | [83](#s657F0C4289B0571FA283AD0EC8BA6546) |

10-K 1 exr-12312017x10k.htm 10-K

| [PART I](#s52FE9A66DF305BE78D4E3D31B1539186) | | [4](#s52FE9A66DF305BE78D4E3D31B1539186) |

| [PART II](#s10923513CFF1520899FA2AEC94510CD0) | | [15](#s10923513CFF1520899FA2AEC94510CD0) |

| [PART IV](#sBEA83E6D88755AC7BA46D72709312045) | | [81](#sBEA83E6D88755AC7BA46D72709312045) |

| [SIGNATURES](#sE8CBD5E0DD7C507BAB2F48B9526F6DCA) | | [84](#sE8CBD5E0DD7C507BAB2F48B9526F6DCA) |

As of December 31, [removed: 2017,] [added: 2018,] we owned or had ownership interests in [removed: 1,061] [added: 1,111] operating stores.

Of these stores, [removed: 846] [added: 878] are wholly-owned, [removed: one is] [added: four are] in [removed: a] consolidated joint [removed: venture,] [added: ventures,] and [removed: 214] [added: 229] are in [added: unconsolidated] joint ventures.

In addition, we managed an additional [removed: 422] [added: 536] stores for third parties bringing the total number of stores which we own and/or manage to [removed: 1,483.][added: 1,647.]

[removed: ][added: ]

As of December 31, [removed: 2017,] [added: 2018,] approximately [removed: 835,000] [added: 910,000] tenants were leasing storage units at the operating stores that we own and/or manage, primarily on a month-to-month basis, providing the flexibility to increase rental rates over time as market conditions permit.

For stores that were stabilized as of December 31, [removed: 2017,] [added: 2018,] the average length of stay was approximately [removed: 14.6] [added: 15.1] months.

The average annual rent per square foot for our existing customers at stabilized stores, net of discounts and bad debt, was [removed: $15.98] [added: $16.16] for the year ended December 31, [removed: 2017,] [added: 2018,] compared to [removed: $15.30] [added: $15.58] for the year ended December 31, [removed: 2016.][added: 2017.]

Average annual rent per square foot for new leases was [removed: $16.77] [added: $17.65] for the year ended December 31, [removed: 2017,] [added: 2018,] compared to [removed: $15.96] [added: $16.58] for the year ended December 31, [removed: 2016.][added: 2017.]

The average discounts, as a percentage of rental revenues, during these periods were [removed: 3.9%] [added: 4.1%] and [removed: 3.6%,] [added: 4.0%,] respectively.

The following table presents additional information regarding net rentable square feet and the number of stores by [removed: state.][added: state:]

| Rhode Island | 2 | | [removed: 131,021] [added: 130,746] | | — | | — | | 1 | | 84,665 | | 3 | | [removed: 215,686] [added: 215,411] | |

| | As of December 31, 2018 | | | | | | | | | | | | | | | |

| Alabama | 8 | | 557,383 | | 1 | | 75,526 | | 12 | | 809,208 | | 21 | | 1,442,117 | |

| Arizona | 23 | | 1,622,247 | | 7 | | 467,395 | | 10 | | 788,388 | | 40 | | 2,878,030 | |

| California | 146 | | 11,419,502 | | 53 | | 3,754,066 | | 62 | | 5,623,178 | | 261 | | 20,796,746 | |

| Colorado | 15 | | 1,005,995 | | 2 | | 186,168 | | 26 | | 1,859,523 | | 43 | | 3,051,686 | |

| Connecticut | 7 | | 526,713 | | 7 | | 600,841 | | 3 | | 199,708 | | 17 | | 1,327,262 | |

| Delaware | — | | — | | 1 | | 76,945 | | 1 | | 69,254 | | 2 | | 146,199 | |

| Florida | 86 | | 6,598,217 | | 22 | | 1,715,503 | | 72 | | 5,418,773 | | 180 | | 13,732,493 | |

| Georgia | 59 | | 4,544,661 | | 5 | | 431,377 | | 14 | | 1,062,676 | | 78 | | 6,038,714 | |

| Hawaii | 9 | | 603,250 | | — | | — | | 7 | | 402,516 | | 16 | | 1,005,766 | |

| Illinois | 31 | | 2,398,915 | | 5 | | 371,543 | | 26 | | 1,834,470 | | 62 | | 4,604,928 | |

| Indiana | 15 | | 949,530 | | 1 | | 57,046 | | 12 | | 766,715 | | 28 | | 1,773,291 | |

| Kansas | 1 | | 49,999 | | 2 | | 108,370 | | 1 | | 70,120 | | 4 | | 228,489 | |

| Kentucky | 11 | | 834,018 | | 1 | | 51,128 | | 4 | | 311,898 | | 16 | | 1,197,044 | |

| Louisiana | 2 | | 150,555 | | — | | — | | 1 | | 131,995 | | 3 | | 282,550 | |

| Maryland | 32 | | 2,564,091 | | 7 | | 530,328 | | 22 | | 1,581,031 | | 61 | | 4,675,450 | |

| Massachusetts | 45 | | 2,843,567 | | 9 | | 560,381 | | 6 | | 402,796 | | 60 | | 3,806,744 | |

| Michigan | 7 | | 559,079 | | 4 | | 313,045 | | 1 | | 102,291 | | 12 | | 974,415 | |

| Minnesota | 4 | | 285,098 | | — | | — | | 5 | | 303,649 | | 9 | | 588,747 | |

| Mississippi | 3 | | 215,912 | | — | | — | | 4 | | 254,530 | | 7 | | 470,442 | |

| Missouri | 5 | | 332,116 | | 2 | | 119,275 | | 8 | | 577,913 | | 15 | | 1,029,304 | |

| Nebraska | — | | — | | — | | — | | 2 | | 128,103 | | 2 | | 128,103 | |

| Nevada | 14 | | 1,038,222 | | 4 | | 472,751 | | 6 | | 772,832 | | 24 | | 2,283,805 | |

| New Hampshire | 2 | | 136,165 | | 2 | | 83,685 | | 1 | | 61,435 | | 5 | | 281,285 | |

| New Jersey | 59 | | 4,630,753 | | 17 | | 1,244,725 | | 8 | | 629,755 | | 84 | | 6,505,233 | |

| New Mexico | 11 | | 720,605 | | 3 | | 163,710 | | 6 | | 523,471 | | 20 | | 1,407,786 | |

| New York | 23 | | 1,741,030 | | 11 | | 856,868 | | 14 | | 742,747 | | 48 | | 3,340,645 | |

| North Carolina | 18 | | 1,319,821 | | 4 | | 291,943 | | 19 | | 1,479,320 | | 41 | | 3,091,084 | |

| Ohio | 17 | | 1,305,735 | | 5 | | 326,227 | | 4 | | 255,628 | | 26 | | 1,887,590 | |

| Oklahoma | — | | — | | — | | — | | 19 | | 1,573,991 | | 19 | | 1,573,991 | |

| Oregon | 6 | | 399,492 | | 4 | | 281,203 | | 7 | | 439,741 | | 17 | | 1,120,436 | |

| Pennsylvania | 17 | | 1,286,132 | | 7 | | 508,876 | | 19 | | 1,359,775 | | 43 | | 3,154,783 | |

| South Carolina | 23 | | 1,756,491 | | 7 | | 476,743 | | 16 | | 1,219,142 | | 46 | | 3,452,376 | |

| Tennessee | 17 | | 1,418,743 | | 12 | | 802,700 | | 12 | | 914,343 | | 41 | | 3,135,786 | |

| Texas | 99 | | 8,519,456 | | 10 | | 705,702 | | 64 | | 5,164,198 | | 173 | | 14,389,356 | |

| Utah | 10 | | 709,291 | | — | | — | | 11 | | 801,250 | | 21 | | 1,510,541 | |

| Virginia | 46 | | 3,678,403 | | 7 | | 564,463 | | 14 | | 1,006,459 | | 67 | | 5,249,325 | |

| Washington | 8 | | 591,323 | | 1 | | 57,405 | | 3 | | 209,002 | | 12 | | 857,730 | |

| Washington, DC | 1 | | 99,664 | | 1 | | 104,070 | | 2 | | 139,173 | | 4 | | 342,907 | |

| Wisconsin | — | | — | | 5 | | 494,325 | | 3 | | 297,281 | | 8 | | 791,606 | |

| | As of December 31, 2017 | | | | | | | | | | | | | | | |

| Alabama | 8 | | 557,887 | | 1 | | 75,286 | | 9 | | 468,712 | | 18 | | 1,101,885 | |

| Arizona | 22 | | 1,536,086 | | 8 | | 554,487 | | 6 | | 420,836 | | 36 | | 2,511,409 | |

| California | 145 | | 11,423,633 | | 53 | | 3,752,368 | | 54 | | 5,072,892 | | 252 | | 20,248,893 | |

| Colorado | 13 | | 853,150 | | 3 | | 247,030 | | 16 | | 1,142,138 | | 32 | | 2,242,318 | |

| Connecticut | 7 | | 524,606 | | 6 | | 485,336 | | 3 | | 218,206 | | 16 | | 1,228,148 | |

| Delaware | — | | — | | 1 | | 76,765 | | — | | — | | 1 | | 76,765 | |

| Florida | 82 | | 6,273,792 | | 17 | | 1,333,795 | | 51 | | 3,775,872 | | 150 | | 11,383,459 | |

| Georgia | 55 | | 4,221,218 | | 3 | | 275,370 | | 13 | | 928,430 | | 71 | | 5,425,018 | |

| Hawaii | 9 | | 603,380 | | — | | — | | 7 | | 403,633 | | 16 | | 1,007,013 | |

| Illinois | 31 | | 2,395,802 | | 4 | | 288,168 | | 18 | | 1,108,036 | | 53 | | 3,792,006 | |

| Indiana | 15 | | 943,492 | | 1 | | 57,010 | | 7 | | 486,709 | | 23 | | 1,487,211 | |

| Kansas | 1 | | 49,999 | | 2 | | 108,770 | | 1 | | 70,480 | | 4 | | 229,249 | |

| Kentucky | 10 | | 767,624 | | 2 | | 111,342 | | 5 | | 359,304 | | 17 | | 1,238,270 | |

| Louisiana | 2 | | 150,355 | | — | | — | | 1 | | 133,810 | | 3 | | 284,165 | |

| Maryland | 32 | | 2,558,639 | | 7 | | 530,788 | | 20 | | 1,346,381 | | 59 | | 4,435,808 | |

| Massachusetts | 41 | | 2,558,305 | | 11 | | 663,963 | | 3 | | 200,511 | | 55 | | 3,422,779 | |

| Michigan | 6 | | 477,254 | | 5 | | 396,484 | | — | | — | | 11 | | 873,738 | |

| Minnesota | 1 | | 74,550 | | — | | — | | 5 | | 325,475 | | 6 | | 400,025 | |

| Mississippi | 3 | | 217,442 | | — | | — | | 4 | | 258,690 | | 7 | | 476,132 | |

| Missouri | 5 | | 331,836 | | 2 | | 119,575 | | 5 | | 301,578 | | 12 | | 752,989 | |

| Nebraska | — | | — | | — | | — | | 2 | | 90,742 | | 2 | | 90,742 | |

| Nevada | 14 | | 1,038,922 | | 4 | | 472,911 | | 7 | | 840,292 | | 25 | | 2,352,125 | |

| New Hampshire | 2 | | 135,932 | | 2 | | 83,685 | | 4 | | 145,280 | | 8 | | 364,897 | |

| New Jersey | 55 | | 4,341,854 | | 19 | | 1,415,395 | | 8 | | 624,589 | | 82 | | 6,381,838 | |

| New Mexico | 10 | | 643,186 | | 4 | | 242,503 | | 4 | | 326,294 | | 18 | | 1,211,983 | |

| New York | 22 | | 1,638,327 | | 12 | | 930,426 | | 14 | | 725,050 | | 48 | | 3,293,803 | |

| North Carolina | 16 | | 1,088,452 | | — | | — | | 15 | | 1,038,417 | | 31 | | 2,126,869 | |

| Ohio | 16 | | 1,217,275 | | 6 | | 415,728 | | 2 | | 111,419 | | 24 | | 1,744,422 | |

| Oklahoma | — | | — | | — | | — | | 16 | | 1,336,611 | | 16 | | 1,336,611 | |

| Oregon | 6 | | 399,292 | | 2 | | 138,275 | | 3 | | 183,795 | | 11 | | 721,362 | |

| Pennsylvania | 16 | | 1,203,819 | | 7 | | 505,496 | | 17 | | 1,203,508 | | 40 | | 2,912,823 | |

| South Carolina | 23 | | 1,741,038 | | 1 | | 85,486 | | 9 | | 666,943 | | 33 | | 2,493,467 | |

| Tennessee | 17 | | 1,423,749 | | 12 | | 802,555 | | 9 | | 654,935 | | 38 | | 2,881,239 | |

| Texas | 97 | | 8,323,425 | | 11 | | 767,115 | | 47 | | 3,699,803 | | 155 | | 12,790,343 | |

| Utah | 10 | | 706,215 | | — | | — | | 6 | | 444,536 | | 16 | | 1,150,751 | |

| Virginia | 44 | | 3,515,299 | | 7 | | 513,857 | | 13 | | 937,276 | | 64 | | 4,966,432 | |

| Washington | 8 | | 591,349 | | — | | — | | 2 | | 145,839 | | 10 | | 737,188 | |

| Washington, DC | 1 | | 99,589 | | 1 | | 104,382 | | 1 | | 73,237 | | 3 | | 277,208 | |

| Wisconsin | — | | — | | — | | — | | 6 | | 562,695 | | 6 | | 562,695 | |

Our common stock [removed: has been] [added: is] traded [added: under the symbol “EXR”] on the New York Stock Exchange [removed: (“NYSE”) under the symbol “EXR”] [added: ("NYSE")] since our IPO on August 17, 2004.

On February [removed: 21, 2018,] [added: 19, 2019,] the closing price of our common stock as reported by the NYSE was [removed: $81.50.][added: $99.11.]

At February [removed: 21, 2018,] [added: 19, 2019,] we had [removed: 423] [added: 362] holders of record of our common stock.

In November 2017, our board of directors authorized a three-year share repurchase program to allow [removed: the Company] [added: us] to acquire shares in aggregate up to $400.0 million.

[removed: The Company expects] [added: We expect] to acquire shares through open market or privately negotiated transactions.

All [removed: other] unregistered sales of equity securities during the year ended December 31, [removed: 2017] [added: 2018] have previously been disclosed in filings with the SEC.

Prior to that time there was no public market for our common stock.

The following table presents, for the periods indicated, the high and low sales price for our common stock as reported by the NYSE and the per share dividends declared:

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | 2017 | | | | | | | | | | | | 2016 | | | | | | | | | | |

| | Range | | | | | | | | Dividends Declared | | | | Range | | | | | | | | Dividends Declared | | |

| Quarter | High | | | | Low | | | | | High | | | | Low | | | | | | | | | |

| 1st | $ | 79.82 | | | $ | 71.64 | | | $ | 0.78 | | | $ | 93.46 | | | $ | 78.42 | | | $ | 0.59 | |

| 2nd | $ | 80.80 | | | $ | 71.79 | | | $ | 0.78 | | | $ | 94.04 | | | $ | 84.95 | | | $ | 0.78 | |

| 3rd | $ | 82.25 | | | $ | 74.13 | | | $ | 0.78 | | | $ | 94.38 | | | $ | 76.17 | | | $ | 0.78 | |

| 4th | $ | 87.86 | | | $ | 78.70 | | | $ | 0.78 | | | $ | 77.66 | | | $ | 68.78 | | | $ | 0.78 | |

On December 28, 2017, our Operating Partnership issued 64,708 common OP units ("OP Units")in connection with the acquisition of one store in Florida.

The store was acquired in exchange for the OP Units, valued at $5.6 million, and approximately $4.9 million in cash.

On December 6, 2017, our Operating Partnership issued 174,020 Series D-2 Preferred Units in connection with a joint venture's acquisition of one store in New York.

We acquired an ownership interest in the store from the issuance of Preferred D-2 Units that was then contributed to the joint venture as an equity contribution.

The OP Units were valued at $4.3 million.

The terms of the common and preferred OP Units are governed by the Operating Partnership’s Fourth Amended and Restated Agreement of Limited Partnership.

The OP Units will be redeemable, at the option of the holders following the expiration of a lock-up period of at least one year from the date of issuance.

The redemption obligation may be satisfied, at our option, in cash or shares of our common stock.

The OP Units were issued in private placements in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

| | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| Total revenues | $ | [removed: 1,105,009] [added: 1,196,604] | | | $ | [removed: 991,875] [added: 1,105,009] | | | $ | [removed: 782,270] [added: 991,875] | | | $ | [removed: 647,155] [added: 782,270] | | | $ | [removed: 520,613] [added: 647,155] | |

| Earnings per share [added: -] basic | $ | [removed: 3.79] [added: 3.29] | | | $ | [removed: 2.92] [added: 3.79] | | | $ | [removed: 1.58] [added: 2.92] | | | $ | [removed: 1.54] [added: 1.58] | | | $ | 1.54 | |

| Earnings per share [added: -] diluted | $ | [removed: 3.76] [added: 3.27] | | | $ | [removed: 2.91] [added: 3.76] | | | $ | [removed: 1.56] [added: 2.91] | | | $ | [removed: 1.53] [added: 1.56] | | | $ | 1.53 | |

| Cash dividends paid per common share | $ | [removed: 3.12] [added: 3.36] | | | $ | [removed: 2.93] [added: 3.12] | | | $ | [removed: 2.24] [added: 2.93] | | | $ | [removed: 1.81] [added: 2.24] | | | $ | [removed: 1.45] [added: 1.81] | |

| Other [removed: Data:] [added: Data] | | | | | | | | | | | | | | | | | | | |

| Acquisitions - [removed: wholly owned] [added: Wholly Owned] | $ | [removed: 627,462] [added: 457,617] | | | $ | [removed: 1,086,645] [added: 627,462] | | | $ | [removed: 1,606,509] [added: 1,086,645] | | | $ | [removed: 563,670] [added: 1,606,509] | | | $ | [removed: 704,449] [added: 563,670] | |

| Acquisitions - [removed: investment in joint ventures] [added: Joint Venture] | [removed: 15,094] [added: 63,723] | | | | [removed: 34,199] [added: 15,094] | | | | [removed: 21,529] [added: 34,199] | | | | [removed: —] [added: 21,529] | | | | — | | |

| Total | $ | [removed: 642,556] [added: 521,340] | | | $ | [removed: 1,120,844] [added: 642,556] | | | $ | [removed: 1,628,038] [added: 1,120,844] | | | $ | [removed: 563,670] [added: 1,628,038] | | | $ | [removed: 704,449] [added: 563,670] | |

| Total assets | $ | [removed: 7,455,137] [added: 7,847,978] | | | $ | [removed: 7,091,446] [added: 7,460,953] | | | $ | [removed: 6,071,407] [added: 7,091,446] | | | $ | [removed: 4,381,987] [added: 6,071,407] | | | $ | [removed: 3,977,140] [added: 4,381,987] | |

| Total notes payable, notes payable to trusts, exchangeable senior notes and revolving lines of credit, [removed: net (2)] [added: net(2)] | $ | [removed: 4,554,217] [added: 4,811,515] | | | $ | [removed: 4,306,223] [added: 4,554,217] | | | $ | [removed: 3,535,621] [added: 4,306,223] | | | $ | [removed: 2,349,764] [added: 3,535,621] | | | $ | [removed: 1,946,647] [added: 2,349,764] | |

| Noncontrolling interests | $ | [removed: 373,056] [added: 371,698] | | | $ | [removed: 351,274] [added: 373,056] | | | $ | [removed: 283,527] [added: 351,274] | | | $ | [removed: 174,558] [added: 283,527] | | | $ | [removed: 173,425] [added: 174,558] | |

| Total stockholders' equity | $ | [removed: 2,350,751] [added: 2,413,724] | | | $ | [removed: 2,244,892] [added: 2,350,751] | | | $ | [removed: 2,089,077] [added: 2,244,892] | | | $ | [removed: 1,737,425] [added: 2,089,077] | | | $ | [removed: 1,758,470] [added: 1,737,425] | |

| Net cash provided by operating activities | $ | [removed: 597,375] [added: 677,795] | | | $ | [removed: 539,263] [added: 597,375] | | | $ | [removed: 367,329] [added: 539,263] | | | $ | [removed: 337,581] [added: 367,329] | | | $ | [removed: 271,259] [added: 337,581] | |

| Net cash provided by [removed: (used in)] financing activities | $ | [removed: (215,994] [added: (247,251] | ) | | $ | [removed: 460,831] [added: (215,994] | [added: )] | | $ | [removed: 1,286,471] [added: 460,831] | | | $ | [removed: 148,307] [added: 1,286,471] | | | $ | [removed: 191,655] [added: 148,307] | |

| (1) | The adoption of FASB ASU 2017-01 on January 1, 2017, has resulted in a decrease in acquisition related costs as [removed: the Company’s] [added: our] acquisition of operating stores are considered asset acquisitions rather than business combinations. |

| Income from operations (1) | $ | 619,703 | | | $ | 654,394 | | | $ | 458,303 | | | $ | 296,157 | | | $ | 268,183 | |

| | 2018 | | | | 2017 | | | | 2016 | | | | 2015 | | | | 2014 | | |

| Net cash used in investing activities(3) | $ | (443,898 | ) | | $ | (353,079 | ) | | $ | (1,048,889 | ) | | $ | (1,626,946 | ) | | $ | (561,154 | ) |

| | |

| --- | --- |

| (3) | In connection with our adoption of FASB ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," on January 1, 2018, we began including amounts generally described as restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Prior year amounts have been reclassified to conform to the current period's presentation. |

| Income from operations (1) | $ | 541,605 | | | $ | 449,838 | | | $ | 294,656 | | | $ | 278,468 | | | $ | 213,483 | |

| Net cash used in investing activities | $ | (369,556 | ) | | $ | (1,032,035 | ) | | $ | (1,625,664 | ) | | $ | (564,948 | ) | | $ | (366,976 | ) |

| [Report of Independent Registered Public Accounting [removed: Firm](#s5507E7BCB99750A39D0FDDD592755DD0)] [added: Firm](#s83C112C3B87A5BCB9BC98EE9674AA959)] | [removed: [34](#s5507E7BCB99750A39D0FDDD592755DD0)] [added: [32](#s83C112C3B87A5BCB9BC98EE9674AA959)] |

| [Consolidated Balance Sheets as of December 31, [removed: 2017] [added: 2018] and [removed: 2016](#s358F5123848C5B9882E2E2EF348FED56)] [added: 2017](#sC79DF96F0A8655CFBD4FE89816D2A4A4)] | [removed: [35](#s358F5123848C5B9882E2E2EF348FED56)] [added: [33](#sC79DF96F0A8655CFBD4FE89816D2A4A4)] |

| [Consolidated Statements of Operations for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015](#s005F0CD1469953C998A086EAF3BD04E2)] [added: 2016](#sD9D4E29FDA2F540A9A4555163C2348BB)] | [removed: [36](#s005F0CD1469953C998A086EAF3BD04E2)] [added: [34](#sD9D4E29FDA2F540A9A4555163C2348BB)] |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015](#s7116F49439BE5F2EA9BA478A64E1E8CB)] [added: 2016](#sF6E0F1BB1C6C5CE4A2076743F7C34364)] | [removed: [37](#s7116F49439BE5F2EA9BA478A64E1E8CB)] [added: [35](#sF6E0F1BB1C6C5CE4A2076743F7C34364)] |

| [Consolidated Statements of Stockholders’ Equity for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015](#s8DCB4990BE175D898B96700A0A48D32E)] [added: 2016](#sDD79B3BD69675DBAB66D4FD3BE88D90B)] | [removed: [38](#s8DCB4990BE175D898B96700A0A48D32E)] [added: [36](#sDD79B3BD69675DBAB66D4FD3BE88D90B)] |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015](#s3156FB4BCA0B5C868AF5094D083845F8)] [added: 2016](#s62F4D6FB16165EFE9C77271B843E01E7)] | [removed: [41](#s3156FB4BCA0B5C868AF5094D083845F8)] [added: [39](#s62F4D6FB16165EFE9C77271B843E01E7)] |

| [Notes to Consolidated Financial [removed: Statements](#sDEF67C3467F0566681E1B42EA081BEF6)] [added: Statements](#s6340D674909055BF97FC8477D96ABA0C)] | [removed: [42](#sDEF67C3467F0566681E1B42EA081BEF6)] [added: [40](#s6340D674909055BF97FC8477D96ABA0C)] |

| [Schedule III - Real Estate and Accumulated [removed: Depreciation](#s44EB682D179E52A2B2AB5125E818B3B3)] [added: Depreciation](#sC2B59DE3E0B754D08787E554ADF86560)] | [removed: [76](#s44EB682D179E52A2B2AB5125E818B3B3)] [added: [75](#sC2B59DE3E0B754D08787E554ADF86560)] |

We have audited the accompanying consolidated balance sheets of Extra Space Storage Inc. (the Company) as of December 31, [removed: 2017 and 2016,] [added: 2018] and [added: 2017,] the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, [removed: 2017,] [added: 2018,] and the related notes and financial statement schedule listed in the Index at Item 8 (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2017,] [added: 2018,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated [removed: March 1, 2018] [added: February 26, 2019] expressed an unqualified opinion [removed: thereon.][added: thereon]

[added: | |] March [removed: 1,] [added: 31,] 2018 [added: | | | | June 30, 2018 | | | | September 30, 2018 | | | | December 31, 2018 | | |]

| | December 31, [removed: 2017] [added: 2018] | | | | December 31, [removed: 2016] [added: 2017] | | |

| [removed: Real] [added: Net real] estate [removed: assets, net] [added: assets] | $ | [added: 7,491,831 | | | $ |] 7,132,431 | | | $ | 6,770,447 | |

| Investments in unconsolidated real estate ventures | [removed: 70,091] [added: —] | | | | [removed: 79,570] [added: —] | | | [added: | (25,055 | | ) |]

| Cash and cash equivalents | [removed: 55,683] [added: 57,496] | | | | [removed: 43,858] [added: 55,683] | | |

| Restricted cash | [removed: 30,361] [added: 15,194] | | | | [removed: 13,884] [added: 30,361] | | |

| Notes payable, net | $ | [removed: 3,738,497] [added: 4,137,213] | | | $ | [removed: 3,213,588] [added: 3,738,497] | |

| Exchangeable senior notes, net | [removed: 604,276] [added: 562,374] | | | | [removed: 610,314] [added: 604,276] | | |

| Notes payable to trusts, net | [removed: 117,444] [added: 30,928] | | | | [removed: 117,321] [added: 117,444] | | |

| Revolving lines of credit | [removed: 94,000] [added: 81,000] | | | | [removed: 365,000] [added: 94,000] | | |

| Accounts payable and accrued expenses | [removed: 96,087] [added: 101,461] | | | | [removed: 101,388] [added: 96,087] | | |

| Other liabilities | [removed: 81,026] [added: 104,383] | | | | [removed: 87,669] [added: 81,026] | | |

| Common stock, $0.01 par value, 500,000,000 shares authorized, [removed: 126,007,091] [added: 127,103,750] and [removed: 125,881,460] [added: 126,007,091] shares issued and outstanding at December 31, [removed: 2017] [added: 2018] and December 31, [removed: 2016,] [added: 2017,] respectively | [removed: 1,260] [added: 1,271] | | | | [removed: 1,259] [added: 1,260] | | |

| Additional paid-in capital | [removed: 2,569,485] [added: 2,640,705] | | | | [removed: 2,566,120] [added: 2,569,485] | | |

| Accumulated other comprehensive income | [removed: 33,290] [added: 34,650] | | | | [removed: 16,770] [added: 33,290] | | |

| Accumulated deficit | [removed: (253,284] [added: (262,902] | | ) | | [removed: (339,257] [added: (253,284] | | ) |

| Total Extra Space Storage Inc. stockholders' equity | [removed: 2,350,751] [added: 2,413,724] | | | | [removed: 2,244,892] [added: 2,350,751] | | |

| Noncontrolling interest represented by Preferred Operating Partnership units, net [removed: of $120,230 notes receivable] | [removed: 159,636] [added: 153,096] | | | | [removed: 147,920] [added: 159,636] | | |

| Noncontrolling interests in Operating Partnership | [removed: 213,301] [added: $] | [added: (1,337] | [added: )] | | [removed: 203,354] [added: $] | [added: —] | | [added: | $ | (577 | ) |]

| Other noncontrolling interests | [removed: 119] [added: —] | | | | [added: (15 | | ) | |] — | | |

| Total noncontrolling interests and equity | [removed: 2,723,807] [added: 2,785,422] | | | | [removed: 2,596,166] [added: 2,723,807] | | |

| Total liabilities, noncontrolling interests and equity | $ | [removed: 7,455,137] [added: 7,847,978] | | | $ | [removed: 7,091,446] [added: 7,460,953] | |

| | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Property rental | $ | [removed: 967,229] [added: 1,039,340] | | | $ | [removed: 864,742] [added: 967,229] | | | $ | [removed: 676,138] [added: 864,742] | |

| Tenant reinsurance | [removed: 98,401] [added: 115,507] | | | | [removed: 87,291] [added: 98,401] | | | | [removed: 71,971] [added: 87,291] | | |

| Management fees and other income | [removed: 39,379] [added: 41,757] | | | | [removed: 39,842] [added: 39,379] | | | | [removed: 34,161] [added: 39,842] | | |

| Total revenues | [removed: 1,105,009] [added: 1,196,604] | | | | [removed: 991,875] [added: 1,105,009] | | | | [removed: 782,270] [added: 991,875] | | |

| Property operations | [removed: 271,974] [added: 291,695] | | | | [removed: 250,005] [added: 271,974] | | | | [removed: 203,965] [added: 250,005] | | |

| Tenant reinsurance | [removed: 19,173] [added: 25,707] | | | | [removed: 15,555] [added: 19,173] | | | | [removed: 13,033] [added: 15,555] | | |

February 26, 2019

| Other assets, net | 158,131 | | | | 166,571 | | |

| Total assets | $ | 7,847,978 | | | $ | 7,460,953 | |

| Cash distributions in unconsolidated real estate ventures | 45,197 | | | | 5,816 | | |

| Total liabilities | 5,062,556 | | | | 4,737,146 | | |

| Noncontrolling interests in Operating Partnership, net and other noncontrolling interests | 218,602 | | | | 213,420 | | |

| Income from operations | 619,703 | | | | 654,394 | | | | 458,303 | | |

| Interest income | 5,292 | | | | 6,736 | | | | 10,998 | | |

| Balances at Balances at December 31, 2017 | $ | 14,940 | | | $ | 41,902 | | | $ | 10,730 | | | $ | 92,064 | | | $ | 213,301 | | | $ | 119 | | | 126,007,091 | | | $ | 1,260 | | | $ | 2,569,485 | | | $ | 33,290 | | | $ | (253,284 | ) | | $ | 2,723,807 | |

| Repayment of receivable for preferred operating units pledged as collateral on loan | — | | | | — | | | | 495 | | | | — | | | | — | | | | — | | | | — | | | — | | | | — | | | | — | | | | — | | | | 495 | | |

| Redemption of Operating Partnership units for cash | — | | | | — | | | | — | | | | — | | | | (1,126 | | ) | | — | | | | — | | | — | | | | (1,432 | | ) | | — | | | | — | | | | (2,558 | | ) |

| Conversion of Preferred C Units in the Operating Partnership for Common Operating Partnership Units | — | | | | — | | | | (6,851 | | ) | | — | | | | 6,851 | | | | — | | | | — | | | — | | | | — | | | | — | | | | — | | | | — | | |

| Noncontrolling interest in consolidated joint venture | — | | | | — | | | | — | | | | — | | | | — | | | | 122 | | | | — | | | — | | | | — | | | | — | | | | — | | | | 122 | | |

| Net income (loss) | 5,035 | | | | 2,514 | | | | 2,731 | | | | 3,715 | | | | 17,797 | | | | (1 | | ) | | — | | | — | | | | — | | | | — | | | | 415,289 | | | | 447,080 | | |

| Other comprehensive income | 12 | | | | — | | | | — | | | | — | | | | 58 | | | | — | | | | — | | | — | | | | — | | | | 1,360 | | | | — | | | | 1,430 | | |

| Distributions to Operating Partnership units held by noncontrolling interests | (5,231 | | ) | | (2,514 | | ) | | (2,731 | | ) | | (3,715 | | ) | | (19,059 | | ) | | — | | | | — | | | — | | | | — | | | | — | | | | — | | | | (33,250 | | ) |

| Balances at Balances at December 31, 2018 | $ | 14,756 | | | $ | 41,902 | | | $ | 4,374 | | | $ | 92,064 | | | $ | 218,362 | | | $ | 240 | | | 127,103,750 | | | $ | 1,271 | | | $ | 2,640,705 | | | $ | 34,650 | | | $ | (262,902 | ) | | $ | 2,785,422 | |

| Net income | $ | 447,080 | | | $ | 514,222 | | | $ | 397,089 | |

| Depreciation and amortization | 209,050 | | | | 193,296 | | | | 182,560 | | |

| Other assets | (1,664 | | ) | | (12,728 | | ) | | (1,614 | | ) |

| Net cash used in investing activities | (443,898 | | ) | | (353,079 | | ) | | (1,048,889 | | ) |

| Principal payments on notes payable to trusts | (88,662 | | ) | | — | | | | — | | |

Certain amounts previously reported in the consolidated financial statements have been reclassified in the accompanying consolidated financial statements to conform to the current period’s presentation, primarily to change the presentation of Gain on real estate transactions, earnout from prior acquisitions, and impairment of real estate on the consolidated statement of operations.

The change was made for the prior periods as the Securities and Exchange Commission has eliminated Rule 3-15(a) of Regulation S-X as part of Release No. 33-10532; 34-83875; IC-33203, which had required REITs to present gain and losses on sale of properties outside of continuing operations in the statement of operations.

Immaterial Correction to Consolidated Balance Sheets

In connection with the preparation of the financial statements for the quarter ended March 31, 2018, the Company determined that the negative balances in the "Investments in unconsolidated real estate ventures" line should be presented separately as liabilities.

As a result, $5,816 should have been reported as "Cash distributions in unconsolidated real estate ventures" as of December 31, 2017.

The Company concluded that the amount was not material to the consolidated balance sheet as of December 31, 2017 but has elected to present these amounts as liabilities in the accompanying financial statements for consistent presentation.

The classification error had no effect on the previously reported consolidated statements of operations, comprehensive income, stockholders' equity or cash flows for the year ended December 31, 2017.

For

The Company's management fees are earned subject to the terms of the related management services agreements ("MSAs").

These MSAs provide that the Company will perform management services, which include leasing and operating the property and providing accounting, marketing, banking, maintenance and other services.

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

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

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

The Company accounts for the management services provided to a customer as a single performance obligation which are rendered over time each month.

The total amount of consideration from the contract is variable as it is based on monthly revenues, which are influenced by multiple factors, some of which are outside the Company's control.

Therefore, the Company recognizes the revenue at the end of each month once the uncertainty is resolved.

Due to the standardized terms of the MSAs, the Company accounts for all MSAs in a similar, consistent manner.

Therefore, no disaggregated information relating to MSAs is presented.

| Receivables from related parties and affiliated real estate joint ventures | 2,847 | | | | 16,611 | | |

| Other assets, net | 163,724 | | | | 167,076 | | |

| Total assets | $ | 7,455,137 | | | $ | 7,091,446 | |

| Total liabilities | 4,731,330 | | | | 4,495,280 | | |

| Income from operations | 541,605 | | | | 449,838 | | | | 294,656 | | |

| Interest income | 3,801 | | | | 6,148 | | | | 3,461 | | |

| Interest income on note receivable from Preferred Operating Partnership unit holder | 2,935 | | | | 4,850 | | | | 4,850 | | |

| Balances at Balances at December 31, 2014 | $ | 14,809 | | | $ | 41,903 | | | $ | 10,730 | | | $ | 13,710 | | | $ | 92,422 | | | $ | 984 | | | 116,360,239 | | | $ | 1,163 | | | $ | 1,995,484 | | | $ | (1,484 | ) | | $ | (257,738 | ) | | $ | 1,911,983 | |

| Purchase of remaining equity interest in existing consolidated joint venture | — | | | | — | | | | — | | | | — | | | | — | | | | (822 | | ) | | — | | | — | | | | (446 | | ) | | — | | | | — | | | | (1,268 | | ) |

| Net income | 6,445 | | | | 2,514 | | | | 2,074 | | | | 685 | | | | 8,344 | | | | — | | | | — | | | — | | | | — | | | | — | | | | 189,474 | | | | 209,536 | | |

| Other comprehensive income (loss) | (15 | | ) | | — | | | | — | | | | — | | | | (46 | | ) | | — | | | | — | | | — | | | | — | | | | (4,868 | | ) | | — | | | | (4,929 | | ) |

| Tax effect from vesting of restricted stock grants and stock option exercises | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | — | | | | 1,727 | | | | — | | | | — | | | | 1,727 | | |

| Distributions to Operating Partnership units held by noncontrolling interests | (7,050 | | ) | | (2,515 | | ) | | (2,074 | | ) | | (685 | | ) | | (12,179 | | ) | | — | | | | — | | | — | | | | — | | | | — | | | | — | | | | (24,503 | | ) |

| Balances at Balances at December 31, 2015 | $ | 14,189 | | | $ | 41,902 | | | $ | 10,730 | | | $ | 13,710 | | | $ | 202,834 | | | $ | 162 | | | 124,119,531 | | | $ | 1,241 | | | $ | 2,431,754 | | | $ | (6,352 | ) | | $ | (337,566 | ) | | $ | 2,372,604 | |

| Receivables from related parties and affiliated real estate joint ventures | 1,966 | | | | 1,367 | | | | (1,436 | | ) |

| Other assets | (14,694 | | ) | | (2,981 | | ) | | (1,172 | | ) |

| Acquisition of SmartStop, net of cash acquired | — | | | | — | | | | (1,200,853 | | ) |

| Change in restricted cash | (16,477 | | ) | | 16,854 | | | | 1,282 | | |

| Net cash used in investing activities | (369,556 | | ) | | (1,032,035 | | ) | | (1,625,664 | | ) |

| Net proceeds from the issuance of 2015 exchangeable senior notes | — | | | | — | | | | 563,500 | | |

| Purchase of interest rate cap | — | | | | — | | | | (2,884 | | ) |

| Receivables from related parties and affiliated real estate joint ventures | — | | | | — | | | | (15,610 | | ) |

| Other noncontrolling interests | — | | | | 162 | | | | — | | |

In our Segment Information in Note 18, the number of segments has changed from three to two.

Management fee revenues are recognized monthly as services are performed and in accordance with the terms of the related management agreements.

Annually, a third party

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

The 2013 Notes could potentially have a dilutive impact on the Company’s earnings per share calculations.

The 2013 Notes are exchangeable by holders into shares of the Company’s common stock under certain circumstances per the terms of the indenture governing the 2013 Notes.

The Company has irrevocably agreed

to pay only cash for the accreted principal amount of the 2013 Notes relative to its exchange obligations, but retained the right to satisfy the exchange obligation in excess of the accreted principal amount in cash and/or common stock.

The Operating Partnership had $575,000 of its 3.125% Exchangeable Senior Notes due 2035 (the “2015 Notes”) issued and outstanding as of December 31, 2017.

The exchange price of the 2015 Notes was $93.80 per share as of December 31, 2017, and could change over time as described in the indenture.

ASU 2014-9 includes all contracts with customers to provide goods and services in the ordinary course of business, except for certain contracts that are specifically excluded from the scope, such as lease contracts and insurance contracts.

Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.

The Company is currently assessing the impact of the adoption on ASU 2016-02 on the Company's consolidated financial statements.

In March 2016, the FASB issued ASU 2016-05, "Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships." ASU 2016-05 clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument does not, in and of itself, require re-designation of that hedging relationship provided that all other hedge accounting criteria continue to be met.

In March 2016, the FASB issued ASU 2016-09, “Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.

The Company adopted this guidance prospectively on January 1, 2017, and prior periods have not been adjusted.

Based on our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2017.][added: 2018.]

We have audited Extra Space Storage Inc.’s internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Extra Space Storage Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, [removed: 2017 and 2016,] [added: 2018] and [added: 2017,] the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period [added: ended December 31, 2018, and the related notes and financial statement schedule listed in the Index at Item 8 and our report dated February 26, 2019 expressed an unqualified opinion thereon.]

February 26, 2019

ended December 31, 2017, and the related notes and financial statement schedule listed in the Index at Item 8 and our report dated March 1, 2018 expressed an unqualified opinion thereon.

March 1, 2018

Information required by this item is incorporated by reference to the information set forth under the captions “Executive Officers,” and “Information About the Board of Directors and its Committees” in our definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after December 31, [removed: 2017.][added: 2018.]

Information with respect to executive compensation is incorporated by reference to the information set forth under the caption “Executive Compensation” in our definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after December 31, [removed: 2017.][added: 2018.]

Information with respect to security ownership of certain beneficial owners and management and related stockholder matters is incorporated by reference to the information set forth under the captions “Executive Compensation” and “Security Ownership of Directors and Officers” in our definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after December 31, [removed: 2017.][added: 2018.]

Information with respect to certain relationships and related transactions is incorporated by reference to the information set forth under the captions “Information about the Board of Directors and its Committees” and “Certain Relationships and Related Transactions” in our Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after December 31, [removed: 2017.][added: 2018.]

Information with respect to principal accounting fees and services is incorporated by reference to the information set forth under the caption “Ratification of Appointment of Independent Registered Public Accounting Firm” in our Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after December 31, [removed: 2017.][added: 2018.]

| [3.4](http://www.sec.gov/Archives/edgar/data/1289490/000110465909034833/a09-14238_1ex3d1.htm) | | [added: Second] Amended and Restated Bylaws of Extra Space Storage Inc.(incorporated by reference to Exhibit 3.1 of Form 8-K filed on [removed: May 26, 2009)] [added: January 17, 2018)] |

| [removed: [3.5](http://www.sec.gov/Archives/edgar/data/1289490/000119312514452700/d842499dex31.htm)] [added: [3.5](http://www.sec.gov/Archives/edgar/data/1289490/000110465913088877/a13-25830_1ex10d1.htm)] | | [removed: Amendment No. 1 to] [added: Fourth] Amended and Restated [removed: Bylaws] [added: Agreement] of [added: Limited Partnership of] Extra Space Storage [removed: Inc.] [added: LP] (incorporated by reference to Exhibit [removed: 3.1] [added: 10.1] of Form 8-K filed [added: on] December [removed: 23, 2014).] [added: 6, 2013).] |

| [removed: [3.7](http://www.sec.gov/Archives/edgar/data/1289490/000119312504124199/dex35.htm)] [added: [3.6](http://www.sec.gov/Archives/edgar/data/1289490/000119312504124199/dex35.htm)] | | Declaration of Trust of ESS Holdings Business Trust II.(1) |

| [removed: [4.6](http://www.sec.gov/Archives/edgar/data/1289490/000110465913050813/a13-14469_4ex4d1.htm)] [added: [4.5](http://www.sec.gov/Archives/edgar/data/1289490/000119312515324511/d96928dex41.htm)] | | Indenture, dated [removed: June] [added: September] 21, [removed: 2013,] [added: 2015,] among Extra Space Storage LP, [added: as issuer,] Extra Space Storage [removed: Inc.] [added: Inc., as guarantor,] and Wells Fargo Bank, National Association, as trustee, including the form of [removed: 2.375%] [added: 3.125%] Exchangeable Senior Notes due [removed: 2033] [added: 2035] and [added: the] form of guarantee (incorporated by reference to Exhibit 4.1 of Form 8-K filed on [removed: June] [added: September] 21, [removed: 2013).] [added: 2015).] |

| [removed: [4.7](http://www.sec.gov/Archives/edgar/data/1289490/000119312515324511/d96928dex41.htm)] [added: [10.14](http://www.sec.gov/Archives/edgar/data/1289490/000119312515324511/d96928dex101.htm)] | | [removed: Indenture,] [added: Registration Rights Agreement,] dated September 21, 2015, among Extra Space Storage LP, [removed: as issuer,] Extra Space Storage Inc., [removed: as guarantor,] [added: Citigroup Global Markets Inc.] and Wells Fargo [removed: Bank, National Association,] [added: Securities, LLC,] as [removed: trustee, including the form] [added: representatives] of [removed: 3.125% Exchangeable Senior Notes due 2035 and] the [removed: form of guarantee] [added: initial purchasers] (incorporated by reference to Exhibit [removed: 4.1] [added: 10.1] of Form 8-K filed on September 21, 2015). |

| [10.8](http://www.sec.gov/Archives/edgar/data/1289490/000104746910001564/a2196671zex-10_26.htm) | | Registration Rights Agreement among Extra Space Storage LP, H. James Knuppe and Barbara Knuppe. (incorporated by reference to Exhibit 10.26 of Form 10-K filed on February 26, [removed: 2010)] [added: 2010).] |

| [removed: [10.11](http://www.sec.gov/Archives/edgar/data/1289490/000110465913050813/a13-14469_4ex10d1.htm)] [added: [10.23](http://www.sec.gov/Archives/edgar/data/1289490/000162828017006872/exhibit101-exr630178kpriva.htm)] | | [removed: Registration Rights] [added: Note Purchase] Agreement, dated [added: as of] June [removed: 21, 2013,] [added: 29, 2017, by and] among Extra Space Storage [removed: LP,] [added: Inc.,] Extra Space Storage [removed: Inc., Citigroup Global Markets Inc.] [added: LP] and [removed: Wells Fargo Securities, LLC] [added: the purchasers named therein] (incorporated by reference to Exhibit 10.1 of Form 8-K filed on June [removed: 21, 2013).] [added: 30, 2017).] |

| [removed: [10.12](http://www.sec.gov/Archives/edgar/data/1289490/000110465914036162/a14-9641_1ex10d1.htm)] [added: [10.11](http://www.sec.gov/Archives/edgar/data/1289490/000110465914036162/a14-9641_1ex10d1.htm)] | | Letter Agreement, dated as of November 22, 2013, amending the Contribution Agreement, dated June 15, 2007, among Extra Space Storage LP and various limited partnerships affiliated with AAAAA Rent-A-Space, and the Promissory Note, dated June 25, 2007, among Extra Space Storage LP, H. James Knuppe and Barbara Knuppe (incorporated by reference to Exhibit 10.1 of Form 10-Q filed on May 8, 2014). |

| [removed: [10.13](http://www.sec.gov/Archives/edgar/data/1289490/000162828017005050/exr-03312017x10qxex101.htm)] [added: [10.12](http://www.sec.gov/Archives/edgar/data/1289490/000162828017005050/exr-03312017x10qxex101.htm)] | | Letter Agreement, dated April 18, 2017, amending the Promissory Note and Waiving a Portion of the Series A Preferred Priority Return, among Extra Space Storage LP, ESS Holdings Business Trust I, H. James Knuppe and Barbara Knuppe (incorporated by reference to Exhibit 10.1 of Form 10-Q filed on May 5, 2017). |

| [removed: [10.14*](http://www.sec.gov/Archives/edgar/data/1289490/000119312515128269/d899582ddef14a.htm)] [added: [10.13*](http://www.sec.gov/Archives/edgar/data/1289490/000119312515128269/d899582ddef14a.htm)] | | 2015 Incentive Award Plan (incorporated by reference to the Definitive Proxy Statement on Schedule 14A filed on April 14, 2015) |

| [removed: [10.15](http://www.sec.gov/Archives/edgar/data/1289490/000119312515324511/d96928dex101.htm)] [added: [10.24](http://www.sec.gov/Archives/edgar/data/1289490/000162828018007425/a52518privatedebtoffering.htm)] | | [removed: Registration Rights] [added: Note Purchase] Agreement, dated [removed: September 21, 2015,] [added: as of May 25, 2018, by and] among Extra Space Storage [removed: LP,] [added: Inc.,] Extra Space Storage [removed: Inc., Citigroup Global Markets Inc.] [added: LP] and [removed: Wells Fargo Securities, LLC, as representatives of] the [removed: initial] purchasers [added: named therein] (incorporated by reference to Exhibit 10.1 [removed: of] [added: to the Current Report on] Form 8-K filed on [removed: September 21, 2015).] [added: May 31, 2018).] |

| [removed: [10.16](http://www.sec.gov/Archives/edgar/data/1289490/000119312516739701/d272035dex101.htm)] [added: [10.15](http://www.sec.gov/Archives/edgar/data/1289490/000119312516739701/d272035dex101.htm)] | | Credit Agreement, dated as of October 14, 2016, by and among Extra Space Storage Inc., Extra Space Storage LP, U.S. Bank National Association, as administrative agent, certain other financial institutions acting as syndication agents, documentation agents, senior management agents and lead arrangers and book runners, and certain lenders party thereto (incorporated by reference to Exhibit 10.1 of Form 8-K filed on October 17, 2016). |

| [removed: [10.17*](http://www.sec.gov/Archives/edgar/data/1289490/000104746908004593/a2184280zdef14a.htm)] [added: [10.16*](http://www.sec.gov/Archives/edgar/data/1289490/000104746908004593/a2184280zdef14a.htm)] | | 2004 Long-Term Compensation Incentive Plan as amended and restated effective March 25, 2008 (incorporated by reference to the Definitive Proxy Statement on Schedule 14A filed on April 14, 2008) |

| [removed: [10.18*](http://www.sec.gov/Archives/edgar/data/1289490/000104746910001564/a2196671zex-10_11.htm)] [added: [10.17*](http://www.sec.gov/Archives/edgar/data/1289490/000104746910001564/a2196671zex-10_11.htm)] | | Form of 2004 Long Term Incentive Compensation Plan Option Award Agreement for Employees with employment agreements. (incorporated by reference to Exhibit 10.11 of Form 10-K filed on February 26, 2010) |

| [removed: [10.19*](http://www.sec.gov/Archives/edgar/data/1289490/000104746910001564/a2196671zex-10_12.htm)] [added: [10.18*](http://www.sec.gov/Archives/edgar/data/1289490/000104746910001564/a2196671zex-10_12.htm)] | | Form of 2004 Long Term Incentive Compensation Plan Option Award Agreement for employees without employment agreements. (incorporated by reference to Exhibit 10.12 of Form 10-K filed on February 26, 2010) |

| [removed: [10.20*](http://www.sec.gov/Archives/edgar/data/1289490/000104746910001564/a2196671zex-10_13.htm)] [added: [10.19*](http://www.sec.gov/Archives/edgar/data/1289490/000104746910001564/a2196671zex-10_13.htm)] | | Form of 2004 Non-Employee Directors Share Plan Option Award Agreement for Directors. (incorporated by reference to Exhibit 10.13 of Form 10-K filed on February 26, 2010) |

| [removed: [10.21*](http://www.sec.gov/Archives/edgar/data/1289490/000110465907080664/a07-25777_1ex10d2.htm)] [added: [10.20*](http://www.sec.gov/Archives/edgar/data/1289490/000110465907080664/a07-25777_1ex10d2.htm)] | | 2004 Long Term Incentive Compensation Plan Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.2 of Form 10-Q filed on November 7, 2007). |

| [removed: [10.22*](http://www.sec.gov/Archives/edgar/data/1289490/000110465907080664/a07-25777_1ex10d4.htm)] [added: [10.21*](http://www.sec.gov/Archives/edgar/data/1289490/000110465907080664/a07-25777_1ex10d4.htm)] | | First Amendment to Extra Space Storage Inc. 2004 Non-Employee Directors’ Share Plan (incorporated by reference to Exhibit 10.4 of Form 10-Q filed on November 7, 2007). |

| [removed: [10.23*](http://www.sec.gov/Archives/edgar/data/1289490/000110465907020726/a07-6564_1ex10d22.htm)] [added: [10.22*](http://www.sec.gov/Archives/edgar/data/1289490/000110465907020726/a07-6564_1ex10d22.htm)] | | Extra Space Storage 2004 Non-Employee Directors’ Share Plan (incorporated by reference to Exhibit 10.22 of Form 10-K/A filed on March 20, 2007). |

| [removed: [21.1](https://www.sec.gov/Archives/edgar/data/1289490/000162828018002649/exr-12312017xex211.htm)] [added: [21.1](https://www.sec.gov/Archives/edgar/data/1289490/000162828019001968/q4201810kex211.htm)] | | Subsidiaries of the Company(2) |

| [removed: [23.1](https://www.sec.gov/Archives/edgar/data/1289490/000162828018002649/exr-12312017xex231.htm)] [added: [23.1](https://www.sec.gov/Archives/edgar/data/1289490/000162828019001968/q4201810kex231.htm)] | | Consent of Ernst & Young LLP(2) |

| [removed: [31.1](https://www.sec.gov/Archives/edgar/data/1289490/000162828018002649/exr-12312017xex311.htm)] [added: [31.1](https://www.sec.gov/Archives/edgar/data/1289490/000162828019001968/q4201810kex311.htm)] | | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(2) |

| [removed: [31.2](https://www.sec.gov/Archives/edgar/data/1289490/000162828018002649/exr-12312017xex312.htm)] [added: [31.2](https://www.sec.gov/Archives/edgar/data/1289490/000162828019001968/q4201810kex312.htm)] | | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(2) |

| [removed: [32.1](https://www.sec.gov/Archives/edgar/data/1289490/000162828018002649/exr-12312017xex321.htm)] [added: [32.1](https://www.sec.gov/Archives/edgar/data/1289490/000162828019001968/q4201810kex321.htm)] | | Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(2) |

| 101 | | The following financial information from Registrant’s Annual Report on Form 10-K for the period ended December 31, [removed: 2014,] [added: 2018,] formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, [removed: 2014] [added: 2018] and [removed: 2013;] [added: 2017;] (ii) Consolidated Statements of Operations for the years ended December 31, [removed: 2014, 2013] [added: 2018, 2017] and [removed: 2012;] [added: 2016;] (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2014, 2013] [added: 2018, 2017] and [removed: 2012;] [added: 2016;] (iv) Consolidated Statements of Stockholders’ Equity for the years ended December 31, [removed: 2014, 2013] [added: 2018, 2017] and [removed: 2012;] [added: 2016;] (v) Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2014, 2013] [added: 2018, 2017] and [removed: 2012;] [added: 2016;] and (vi) Notes to Consolidated Financial Statements(2). |

| Date: [removed: March 1, 2018] [added: February 26, 2019] | | By: | | /s/ JOSEPH D. MARGOLIS |

| Date: [removed: March 1, 2018] [added: February 26, 2019] | | By: | | /s/ P. SCOTT STUBBS |

| Date: [removed: March 1, 2018] [added: February 26, 2019] | | By: | | /s/ GRACE KUNDE |

| Date: [removed: March 1, 2018] [added: February 26, 2019] | | By: | | /s/ KENNETH M. WOOLLEY |

| | | | | Kenneth M. Woolley [removed: Executive] Chairman [added: of the Board] |

| Date: [removed: March 1, 2018] [added: February 26, 2019] | | By: | | /s/ SPENCER F. KIRK |

| Date: [removed: March 1, 2018] [added: February 26, 2019] | | By: | | /s/ DENNIS LETHAM |

| Date: [removed: March 1, 2018] [added: February 26, 2019] | | By: | | /s/ DIANE OLMSTEAD |

| Date: [removed: March 1, 2018] [added: February 26, 2019] | | By: | | /s/ ROGER B. PORTER |

| [10.25](http://www.sec.gov/Archives/edgar/data/1289490/000119312518346434/d673021d8k.htm) | | Amended and Restated Credit Agreement, dated as of December 7, 2018, by and among Extra Space Storage Inc., Extra Space Storage LP, U.S. Bank National Association, as administrative agent, certain other financial institutions acting as syndication agents, documentation agents and lead arrangers and book runners, and certain lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 10, 2018). |

| Date: February 26, 2019 | | By: | | /s/ JOSEPH D. MARGOLIS |

| Date: February 26, 2019 | | By: | | /s/ ASHLEY DREIER |

| | | | | Ashley Dreier Director |

| [3.6](http://www.sec.gov/Archives/edgar/data/1289490/000110465913088877/a13-25830_1ex10d1.htm) | | Fourth Amended and Restated Agreement of Limited Partnership of Extra Space Storage LP (incorporated by reference to Exhibit 10.1 of Form 8-K filed on December 6, 2013). |

| [10.24](http://www.sec.gov/Archives/edgar/data/1289490/000162828017006872/exhibit101-exr630178kpriva.htm) | | Note Purchase Agreement, dated as of June 29, 2017, by and among Extra Space Storage Inc., Extra Space Storage LP and the purchasers named therein (incorporated by reference to Exhibit 10.1 of Form 8-K filed on June 30, 2017). |

| Date: March 1, 2018 | | By: | | /s/ K. FRED SKOUSEN |

| | | | | K. Fred Skousen Director |