Item 8. Financial Statements and Supplementary Data

EXTRA SPACE STORAGE INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND SCHEDULES

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)			34
Consolidated Balance Sheets as of December 31, 2024 and 2023			36
Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022			37
Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022			38
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, 2023 and 2022			39
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022			42
Notes to Consolidated Financial Statements			43
Schedule III - Real Estate and Accumulated Depreciation			75

All other schedules have been omitted since the required information is not present or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements or notes thereto.

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Extra Space Storage Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Extra Space Storage Inc. (the Company) as of December 31, 2024 and 2023, 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, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, 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, 2024, 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 February 28, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

			Purchase Price Allocation
Description of the Matter			For the year ended December 31, 2024, the Company completed the acquisition of 58 self-storage properties (“stores”) for a total purchase price of $581.0 million. As further discussed in Notes 2 and 5 of the consolidated financial statements, the transactions were accounted for as asset acquisitions, and the purchase price was allocated based on a relative fair value of assets acquired and liabilities assumed.
			Auditing the accounting for the Company’s 2024 acquisitions of stores was subjective because the Company had to exercise a high level of judgment in determining the estimated fair value of acquired land and buildings. The estimated fair value of land was based on comparable market information adjusted for differences in land characteristics. The estimated fair value of the acquired buildings was based upon the estimated replacement cost, which was calculated by estimating the cost of building similar stores in comparable markets and adjusting those costs for the age, quality, and building characteristics associated with the acquired stores. Determining the fair value of the acquired land and buildings were challenging due to the judgment utilized by management in determining the significant assumptions utilized in, or the adjustments applied to, the valuation of acquired land and buildings.
How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over management’s accounting for acquired stores, including controls over the review of significant assumptions underlying the purchase price allocation and accuracy of the underlying data used. For example, we tested controls over the determination of the fair value of the land and building assets, including the controls over the review of the valuation models and the underlying significant assumptions used to develop such estimates.
			For the 2024 store acquisitions described above, our procedures included, but were not limited to, reading the purchase and sale agreements and other closing documents and performing sensitivity analyses. For certain of these store acquisitions, we also evaluated the methods and significant assumptions used by the Company to determine the fair value of the land and buildings, tested the completeness and accuracy of the underlying data supporting the significant assumptions and estimates, performed analytical procedures, and obtained corroborative market data. Additionally, for certain of these store acquisitions, we involved our valuation specialists to assist in the assessment of the methodology utilized by the Company and to perform corroborative analyses to assess whether the conclusions in the valuation were supported by observable market data. For example, our valuation specialists used independently identified data sources to evaluate management’s selected comparable land sales and building replacement cost assumptions.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2005.

Salt Lake City, Utah

February 28, 2025

Extra Space Storage Inc.

Consolidated Balance Sheets

(amounts in thousands, except share data)

			December 31, 2024						December 31, 2023
Assets:
Real estate assets, net			$	24,587,627					$	24,555,873
Real estate assets - operating lease right-of-use assets			689,803						227,241
Investments in unconsolidated real estate entities			1,332,338						1,071,617
Investments in debt securities and notes receivable			1,550,950						904,769
Cash and cash equivalents			138,222						99,062
Other assets, net			548,986						597,700
Total assets			$	28,847,926					$	27,456,262
Liabilities, Noncontrolling Interests and Equity:
Secured notes payable, net			$	1,010,541					$	1,273,549
Unsecured term loans, net			2,192,507						2,650,581
Unsecured senior notes, net			7,756,968						6,410,618
Revolving lines of credit and commercial paper			1,362,000						682,000
Operating lease liabilities			705,845						236,515
Cash distributions in unconsolidated real estate ventures			75,319						71,069
Accounts payable and accrued expenses			346,519						334,518
Other liabilities			538,865						383,463
Total liabilities			13,988,564						12,042,313
Commitments and contingencies
Noncontrolling Interests and Equity:
Extra Space Storage Inc. stockholders' equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued or outstanding			—						—
Common stock, $0.01 par value, 500,000,000 shares authorized, 211,995,510 and 211,278,803 shares issued and outstanding at December 31, 2024 and 2023, respectively			2,120						2,113
Additional paid-in capital			14,831,946						14,750,388
Accumulated other comprehensive income			12,806						17,435
Accumulated deficit			(899,337)						(379,015)
Total Extra Space Storage Inc. stockholders' equity			13,947,535						14,390,921
Noncontrolling interest represented by Preferred Operating Partnership units			76,092						222,360
Noncontrolling interests in Operating Partnership, net and other noncontrolling interests			835,735						800,668
Total noncontrolling interests and equity			14,859,362						15,413,949
Total liabilities, noncontrolling interests and equity			$	28,847,926					$	27,456,262

See notes to consolidated financial statements.

Extra Space Storage Inc.

Consolidated Statements of Operations

(amounts in thousands, except share data)

			For the Year Ended December 31,
			2024						2023						2022
Revenues:
Property rental			$	2,803,252					$	2,222,578					$	1,654,735
Tenant reinsurance			332,795						235,680						185,531
Management fees and other income			120,855						101,986						83,904
Total revenues			3,256,902						2,560,244						1,924,170
Expenses:
Property operations			831,566						612,036						435,342
Tenant reinsurance			73,886						58,874						33,560
Transaction costs			—						—						1,548
Life Storage Merger transition costs			—						66,732						—
General and administrative			167,398						146,408						129,251
Depreciation and amortization			783,023						506,053						288,316
Total expenses			1,855,873						1,390,103						888,017
Gain (loss) on real estate assets held for sale and sold, net			(25,906)						—						14,249
Impairment of Life Storage trade name			(51,763)						—						—
Income from operations			1,323,360						1,170,141						1,050,402
Interest expense			(551,354)						(419,035)						(219,171)
Non-cash interest expense related to amortization of discount on Life Storage unsecured senior notes			(43,720)						(18,786)						—
Interest income			124,422						84,857						69,422
Income before equity in earnings and dividend income from unconsolidated real estate entities and income tax expense			852,708						817,177						900,653
Equity in earnings and dividend income from unconsolidated real estate entities			67,272						54,835						41,428
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest			13,730						—						—
Income tax expense			(33,478)						(21,559)						(20,925)
Net income			900,232						850,453						921,156
Net income allocated to Preferred Operating Partnership noncontrolling interests			(7,262)						(9,011)						(17,623)
Net income allocated to Operating Partnership and other noncontrolling interests			(38,289)						(38,244)						(42,845)
Net income attributable to common stockholders			$	854,681					$	803,198					$	860,688
Earnings per common share
Basic			$	4.03					$	4.74					$	6.41
Diluted			$	4.03					$	4.74					$	6.41
Weighted average number of shares
Basic			211,575,240						169,216,989						134,050,815
Diluted			211,577,680						169,220,882						141,681,388

See notes to consolidated financial statements.

Extra Space Storage Inc.

Consolidated Statements of Comprehensive Income

(amounts in thousands)

			For the Year Ended December 31,
			2024						2023						2022
Net income			$	900,232					$	850,453					$	921,156
Other comprehensive income:
Change in fair value of interest rate swaps			(4,746)						(32,752)						96,249
Total comprehensive income			895,486						817,701						1,017,405
Less: comprehensive income attributable to noncontrolling interests			45,434						45,866						65,373
Comprehensive income attributable to common stockholders			$	850,052					$	771,835					$	952,032

See notes to consolidated financial statements.

Extra Space Storage Inc.

Consolidated Statements of Stockholders' Equity

(amounts in thousands, except share data)

																											Noncontrolling Interests																		Extra Space Storage Inc. Stockholders' Equity
																											Preferred Operating Partnership						Operating Partnership						Other						Shares						Par Value						Additional Paid-in Capital						Accumulated Other Comprehensive Income (Loss)						Accumulated Deficit						Total Noncontrolling Interests and Equity
Balances at December 31, 2021																											$	259,110					$	410,053					$	317					133,922,305						$	1,339					$	3,285,948					$	(42,546)					$	(128,245)					$	3,785,976
Issuance of common stock in connection with share based compensation																											—						—						—						204,349						2						21,386						—						—						21,388
Restricted stock grants canceled																											—						—						—						(10,614)						—						—						—						—						—
Redemption of Operating Partnership units for cash																											—						(1,654)						—						—						—						(2,963)						—						—						(4,617)
Redemption of Preferred B Units in the Operating Partnership for cash																											(4,500)						—						—						—						—						—						—						—						(4,500)
Issuance of Operating Partnership units in conjunction with business combinations																											—						16,000						—						—						—						—						—						—						16,000
Issuance of Operating Partnership units in conjunction with acquisitions																											—						125,000						—						—						—						—						—						—						125,000
Issuance of Preferred D units in the Operating Partnership in conjunction with business combinations																											6,000						—						—						—						—						—						—						—						6,000
Issuance of common stock in conjunction with acquisitions																											—						—						—						186,766						2						40,961						—						—						40,963
Repurchase of common stock, net of offering costs																											—						—						—						(381,786)						(4)						—						—						(63,004)						(63,008)
Noncontrolling interest in consolidated joint ventures																											—						—						771						—						—						—						—						—						771
Net income (loss)																											17,623						42,853						(8)						—						—						—						—						860,688						921,156
Other comprehensive income																											577						4,328						—						—						—						—						91,344						—						96,249
Distributions to Operating Partnership units held by noncontrolling interests																											(17,308)						(40,485)						—						—						—						—						—						—						(57,793)
Dividends paid on common stock at $6.00 per share																											—						—						—						—						—						—						—						(805,311)						(805,311)
Balances at December 31, 2022																											$	261,502					$	556,095					$	1,080					133,921,020						$	1,339					$	3,345,332					$	48,798					$	(135,872)					$	4,078,274

Extra Space Storage Inc.

Consolidated Statements of Stockholders' Equity

(amounts in thousands, except share data)

																											Noncontrolling Interests																		Extra Space Storage Inc. Stockholders' Equity
																											Preferred Operating Partnership						Operating Partnership						Other						Shares						Par Value						Additional Paid-in Capital						Accumulated Other Comprehensive Income (Loss)						Accumulated Deficit						Total Noncontrolling Interests and Equity
Balances at December 31, 2022																											$	261,502					$	556,095					$	1,080					133,921,020						$	1,339					$	3,345,332					$	48,798					$	(135,872)					$	4,078,274
Issuance of common stock in connection with share based compensation																											—						—						—						149,995						2						26,636						—						—						26,638
Taxes paid upon net settlement of share based compensation																											—						—						—						(8,295)						—						(7,640)						—						—						(7,640)
Restricted stock grants canceled																											—						—						—						(10,084)						—						—						—						—						—
Redemption of Operating Partnership units for stock																											—						(225)						—						2,803						—						225						—						—						—
Redemption of Operating Partnership units for cash																											—						(89)						—						—						—						(19)						—						—						(108)
Redemption of Preferred A Units in the Operating Partnership for stock																											(16,339)						—						—						851,698						8						11,015						—						—						(5,316)
Redemption of Preferred D Units in the Operating Partnership for stock																											(22,265)						—						—						154,307						2						22,263						—						—						—
Redemption of Preferred D Units in the Operating Partnership for cash																											(377)						—						—						—						—						—						—						—						(377)
Life Storage Merger issuance of common stock and Operating Partnership units																											—						249,470						—						76,217,359						762						11,352,576						—						—						11,602,808
Noncontrolling interest in consolidated joint ventures																											—						—						7,959						—						—						—						—						—						7,959
Net income (loss)																											9,011						38,369						(125)						—						—						—						—						803,198						850,453
Other comprehensive loss																											—						(1,389)						—						—						—						—						(31,363)						—						(32,752)
Distributions to Operating Partnership units held by noncontrolling interests																											(9,172)						(50,477)						—						—						—						—						—						—						(59,649)
Dividends paid on common stock at $6.48 per share																											—						—						—						—						—						—						—						(1,046,341)						(1,046,341)
Balances at December 31, 2023																											$	222,360					$	791,754					$	8,914					211,278,803						$	2,113					$	14,750,388					$	17,435					$	(379,015)					$	15,413,949

Extra Space Storage Inc.

Consolidated Statements of Stockholders' Equity

(amounts in thousands, except share data)

																											Noncontrolling Interests																		Extra Space Storage Inc. Stockholders' Equity
																											Preferred Operating Partnership						Operating Partnership						Other						Shares						Par Value						Additional Paid-in Capital						Accumulated Other Comprehensive Income (Loss)						Accumulated Deficit						Total Noncontrolling Interests and Equity
Balances at December 31, 2023																											$	222,360					$	791,754					$	8,914					211,278,803						$	2,113					$	14,750,388					$	17,435					$	(379,015)					$	15,413,949
Issuance of common stock for share based compensation, exercise of options and taxes paid upon net settlement																											—						—						—						177,545						2						22,904						—						—						22,906
Issuance of common stock, net of offering costs																											—						—						—						2,310						—						365						—						—						365
Offering costs associated with shelf registration																											—						—						—						—						—						(522)						—						—						(522)
Redemption of Operating Partnership units for stock																											(31,054)						(28,658)						—						536,852						5						59,707						—						—						—
Redemption of Operating Partnership units for cash																											—						(1,445)						—						—						—						(896)						—						—						(2,341)
Redemption of Preferred D Units in the Operating Partnership for loans																											(87,696)						—						—						—						—						—						—						—						(87,696)
Conversion of Preferred D Units in the Operating Partnership for Operating Partnership units																											(27,518)						27,518						—						—						—						—						—						—						—
Issuance of Operating Partnership units in conjunction with acquisitions																											—						100,417						—						—						—						—						—						—						100,417
Issuance of note receivable to Operating Partnership unit holder																											—						(50,000)						—						—						—						—						—						—						(50,000)
Repayment of receivable with Operating Partnership units pledged as collateral																											—						1,900						—						—						—						—						—						—						1,900
Noncontrolling interest in consolidated joint ventures																											—						—						3,078						—						—						—						—						—						3,078
Net income																											7,262						38,239						50						—						—						—						—						854,681						900,232
Other comprehensive loss																											—						(117)						—						—						—						—						(4,629)						—						(4,746)
Distributions to Operating Partnership units and other noncontrolling interests																											(7,262)						(55,710)						(205)						—						—						—						—						—						(63,177)
Dividends paid on common stock at $6.48 per share																											—						—						—						—						—						—						—						(1,375,003)						(1,375,003)
Balances at December 31, 2024																											$	76,092					$	823,898					$	11,837					211,995,510						$	2,120					$	14,831,946					$	12,806					$	(899,337)					$	14,859,362

See notes to consolidated financial statements.

Extra Space Storage Inc.

Consolidated Statements of Cash Flows

(amounts in thousands)

			For the Year Ended December 31,
			2024						2023						2022
Cash flows from operating activities:
Net income			$	900,232					$	850,453					$	921,156
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			783,023						506,053						288,316
Amortization of deferred financing costs			16,673						18,949						8,773
Non-cash interest expense related to amortization of discount on Life Storage unsecured senior notes			43,720						18,786						—
Non-cash item - Amortization of Premium Portion of Dec 2024 $300M Bond Add-On			(197)						—						—
Accrual of interest income added to principal of debt securities and notes receivable			(31,367)						(37,907)						(38,412)
Compensation expense related to share-based awards			22,906						26,638						21,386
(Gain) loss on real estate assets held for sale and sold, net			25,906						—						(14,249)
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest			(13,730)						—						—
Impairment of Life Storage trade name			51,763						—						—
Distributions from unconsolidated real estate ventures			30,745						20,060						13,162
Changes in operating assets and liabilities:
Other assets			(12,043)						(32,507)						695
Accounts payable and accrued expenses			964						35,031						29,027
Other liabilities			68,835						(3,082)						8,285
Net cash provided by operating activities			1,887,430						1,402,474						1,238,139
Cash flows from investing activities:
Acquisition of real estate assets and improvements			(650,535)						(320,711)						(1,291,491)
Life Storage Merger, net of cash acquired			—						(1,182,411)						—
Cash paid for business combination			—						—						(157,302)
Development and redevelopment of real estate assets			(128,618)						(100,181)						(62,019)
Proceeds from sale of real estate assets and investments in real estate ventures			124,928						2,132						39,367
Investment in unconsolidated real estate entities			(301,917)						(180,279)						(118,963)
Return of investment in unconsolidated real estate ventures			15,413						—						342
Issuance of notes receivable			(960,272)						(330,499)						(529,245)
Proceeds from sale of notes receivable			183,632						167,495						210,048
Principal payments received from notes receivable			140,963						142,192						283,636
Issuance of loan collateralized with OP units			(50,000)						—						—
Purchase of equipment and fixtures			(20,514)						(15,994)						(22,832)
Net cash used in investing activities			(1,646,920)						(1,818,256)						(1,648,459)
Cash flows from financing activities:
Proceeds from unsecured term loans, senior notes, revolving lines of credit and commercial paper			8,685,933						7,113,003						5,188,011
Principal payments on unsecured term loans, senior notes, revolving lines of credit and commercial paper			(8,724,444)						(7,088,984)						(4,207,700)
Proceeds from issuance of public bonds, net			1,300,000						1,550,000						396,100
Deferred financing costs			(23,130)						(39,418)						(9,321)
Proceeds from share issuances			365						—						—
Repurchase of common stock			—						—						(63,008)
Redemption of Preferred OP units for cash			—						(5,377)						(4,500)
Offering costs associated with shelf registration			(522)						—						—
Redemption of Operating Partnership units for cash			(2,341)						(108)						(4,617)
Contributions from noncontrolling interests			29						74						—
Dividends paid on common stock			(1,375,003)						(1,046,341)						(805,311)
Distributions to noncontrolling interests			(63,177)						(59,719)						(57,793)
Net cash (used in) provided by financing activities			(202,290)						423,130						431,861
Net (decrease) increase in cash, cash equivalents, and restricted cash			38,220						7,348						21,541
Cash, cash equivalents, and restricted cash, beginning of the period			105,083						97,735						76,194
Cash, cash equivalents, and restricted cash, end of the period			$	143,303					$	105,083					$	97,735
Cash and equivalents, including restricted cash at the beginning of the period:
Cash and equivalents			$	99,062					$	92,868					$	71,126
Restricted cash included in other assets			6,021						4,867						5,068
			$	105,083					$	97,735					$	76,194
Cash and equivalents, including restricted cash at the end of the period:
Cash and equivalents			$	138,222					$	99,062					$	92,868
Restricted cash included in other assets			5,081						6,021						4,867
			$	143,303					$	105,083					$	97,735
Supplemental schedule of cash flow information
Interest paid			$	499,417					$	338,552					$	197,069
Income taxes paid			33,772						22,753						18,957
Supplemental schedule of noncash investing and financing activities:
Redemption of Operating Partnership units held by noncontrolling interests for common stock
Noncontrolling interests in Operating Partnership			$	(32,954)					$	(116,336)					$	—
Common stock and paid-in capital			31,054						16,336						—
Noncontrolling interests in Operating Partnership Note Receivable Payoff			1,900						100,000						—
Redemption of Preferred D Units in the Operating Partnership for loans
Preferred OP units redeemed			$	(87,696)					$	—					$	—
Note Payable			87,696						—						—
Issuance of OP and Preferred OP units in conjunction with business combination
Preferred OP units issued			$	—					$	—					$	(6,000)
OP units issued			—						—						(16,000)
Conversion of Preferred OP Units to common OP Units
Preferred OP Units			$	27,518					$	—					$	—
Common OP Units			(27,518)						—						—
Acquisition and establishment of operating lease right of use assets and lease liabilities
Real estate assets - operating lease right-of-use assets			$	486,266					$	265					$	16,298
Operating lease liabilities			(486,266)						(265)						(16,298)
Acquisitions of real estate assets
Real estate assets, net			$	101,403					$	—					$	171,703
Value of equity issued			(100,414)						—						(165,965)
Net liabilities assumed			(2,842)						—						—
Investment in unconsolidated real estate ventures			1,853						—						1,085
Finance lease liability			—						—						(6,823)
Life Storage Merger real estate assets
Real estate assets, net			$	—					$	13,575,501					$	—
Value of common stock issued			—						(11,353,338)						—
Unsecured senior notes			—						(2,106,866)						—
Value of OP units issued			—						(249,470)						—
Net liabilities assumed			—						(191,077)						—
Investment in unconsolidated real estate ventures			—						325,250						—
Accrued construction costs and capital expenditures
Acquisition of real estate assets			$	11,037					$	10,508					$	368
Accounts payable and accrued expenses			(11,037)						(10,508)						(368)
Buyback of bridge loan
Real estate assets, net			$	39,200					$	—					$	—
Bridge loan receivable			(39,200)						—						—

See notes to consolidated financial statements.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

1. DESCRIPTION OF BUSINESS

Extra Space Storage Inc. (the “Company”) is a fully integrated, self-administered and self-managed real estate investment trust (“REIT”), formed as a Maryland corporation on April 30, 2004, to own, operate, manage, acquire, develop and redevelop professionally managed self-storage properties located throughout the United States. The Company was formed to continue the business of Extra Space Storage LLC and its subsidiaries, which had engaged in the self-storage business since 1977. The Company’s interest in its stores is held through its operating partnership, Extra Space Storage LP (the “Operating Partnership”), which was formed on May 5, 2004. The Company’s primary assets are general partner and limited partner interests in the Operating Partnership, which meets the definition of a variable interest entity and is consolidated. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT.

The Company invests in stores by acquiring wholly-owned stores or by acquiring an equity interest in real estate entities. At December 31, 2024, the Company had direct and indirect equity interests in 2,436 storage facilities. In addition, the Company managed 1,575 stores for third parties bringing the total number of stores which it owns and/or manages to 4,011. These stores are located in 42 states and Washington, D.C. The Company offers tenant reinsurance at its owned and managed stores that insures the value of goods in the storage units and also offers bridge loan financing to certain of its third-party self-storage owners.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements are presented on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its wholly- or majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Principles of Consolidation

The Company accounts for arrangements that are not controlled through voting or similar rights as variable interest entities (“VIEs”). An enterprise is required to consolidate a VIE if it is the primary beneficiary of the VIE. A VIE is created when (i) the equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, or (ii) the entity’s equity holders as a group either: (a) lack the power, through voting or similar rights, to direct the activities of the entity that most significantly impact the entity’s economic performance, (b) are not obligated to absorb expected losses of the entity if they occur, or (c) do not have the right to receive expected residual returns of the entity if they occur. If an entity is deemed to be a VIE, the enterprise that is deemed to have a variable interest, or combination of variable interests, that provides the enterprise with a controlling financial interest in the VIE, is considered the primary beneficiary and must consolidate the VIE.

The Company has concluded that under certain circumstances when the Company enters into arrangements for the formation of joint ventures or when entering into a new bridge loan agreement, a VIE may be created under condition (i), (ii), (b) or (c) of the previous paragraph. For each VIE created, the Company has performed a qualitative analysis, including considering which party, if any, has the power to direct the activities most significant to the economic performance of each VIE and whether that party has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. If the Company is determined to be the primary beneficiary of the VIE, the assets, liabilities and operations of the VIE are consolidated with the Company’s financial statements.

The Company determined that its operating partnership met the definition of a VIE and is consolidated. Additionally, as of December 31, 2024 the Company determined in addition to its operating partnership that it had one consolidated joint venture VIE, consisting of one store.

Substantially all of the assets and liabilities of the Company are related to the operating partnership VIE. The assets and credit of the VIE can only be used to satisfy the VIE's own contractual obligations, and the VIE's creditors have no recourse to the general credit of the Company.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value Disclosures

Derivative financial instruments

Currently, the Company uses interest rate swaps to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate forward curves.

The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. In conjunction with the Financial Accounting Standard Board’s fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of December 31, 2024, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2024, aggregated by the level in the fair value hierarchy within which those measurements fall:

									Fair Value Measurements at Reporting Date Using
Description			December 31, 2024						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Other assets - Cash flow hedge swap agreements			$	15,733					$	—					$	15,733					$	—
Other liabilities - Cash flow hedge swap agreements			710						—						710						—

There were no transfers of assets and liabilities between Level 1 and Level 2 during the year ended December 31, 2024. The Company did not have any significant assets or liabilities that are re-measured on a recurring basis using significant unobservable inputs as of December 31, 2024 or 2023.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Long-lived assets held for use are evaluated for impairment when events or circumstances indicate there may be impairment. The Company reviews each store at least annually to determine if any such events or circumstances have occurred or exist. The Company focuses on stores where occupancy and/or rental income have decreased by a significant amount. For these stores, the Company determines whether the decrease is temporary or permanent, and whether the store will likely recover the lost occupancy and/or revenue in the short term. In addition, the Company reviews stores in the lease-up stage and compares actual operating results to original projections.

When the Company determines that an event that may indicate impairment has occurred, the Company compares the carrying value of the related long-lived assets to the undiscounted future net operating cash flows attributable to the assets. An impairment loss is recorded if the net carrying value of the assets exceeds the undiscounted future net operating cash flows attributable to the assets. The impairment loss recognized equals the excess of net carrying value over the related fair value of the assets.

When real estate assets are identified by management as held for sale, the Company discontinues depreciating the assets and estimates the fair value of the assets, net of selling costs. The Company compares the carrying value of the related long-lived assets to the discounted future net operating cash flows attributable to the assets (categorized within Level 3 of the fair value hierarchy). If the estimated fair value, net of selling costs, of the assets that have been identified as held for sale is less than the net carrying value of the assets, the Company would recognize a loss on the assets held for sale. The operations of assets held for sale or sold during the period are presented as part of normal operations. Refer to the Real Estate Assets footnote below for further discussion on the Company's held for sale properties for the year ended December 31, 2024.

The Company assesses annually whether there are any indicators that the value of the Company’s investments in unconsolidated real estate entities may be impaired and when events or circumstances indicate that there may be impairment. An investment is impaired if management’s estimate of the fair value of the investment is less than its carrying value. To the extent impairment has occurred, and is considered to be other than temporary, the loss is measured as the excess of the carrying amount of the investment over the fair value of the investment.

The Company evaluates goodwill for impairment at least annually and whenever events, circumstances, and other related factors indicate that fair value of the related reporting unit may be less than the carrying value. If the fair value of the reporting unit is determined to exceed the aggregate carrying amount, no impairment charge is recorded. Otherwise, an impairment charge is recorded for the amount in which the carrying value of the reporting unit exceeds the fair value. No impairments of goodwill were recorded for any period presented herein.

As of December 31, 2024 and 2023, the Company did not have any assets or liabilities measured at fair value on a nonrecurring basis.

Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, restricted cash, receivables, other financial instruments included in other assets, net, accounts payable and accrued expenses, variable-rate notes payable, investments in debt securities and notes receivable, revolving lines of credit and commercial paper and other liabilities reflected in the consolidated balance sheets at December 31, 2024 and 2023, approximate fair value. Restricted cash is comprised of funds deposited with financial institutions located throughout the United States primarily relating to operating cash reserve for the Company's captive insurance subsidiary and earnest money deposits on potential acquisitions.

The fair values of the Company’s notes receivable from Common Operating Partnership unit holders were based on the discounted estimated future cash flow of the notes (categorized within Level 3 of the fair value hierarchy); the discount rate used approximated the current market rate for loans with similar maturities and credit quality. The fair values of the Company’s fixed rate notes payable were estimated using the discounted estimated future cash payments to be made on such debt (categorized within Level 3 of the fair value hierarchy); the discount rates used approximated current market rates for loans, or groups of loans, with similar maturities and credit quality.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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

			December 31, 2024												December 31, 2023
			Fair Value						Carrying Value						Fair Value						Carrying Value
Notes receivable from Preferred and Common Operating Partnership unit holders			$	52,112					$	50,000					$	1,886					$	1,900
Fixed rate notes receivable			40,818						42,000						—						—
Fixed rate debt			8,949,297						9,420,848						7,482,054						8,048,605

Real Estate Assets

Real estate assets are stated at cost, less accumulated depreciation. Direct and allowable internal costs associated with the development, construction, renovation, and improvement of real estate assets are capitalized. Interest, property taxes, and other costs associated with development incurred during the construction period are capitalized. The construction period begins when expenditures for the real estate assets have been made and activities that are necessary to prepare the asset for its intended use are in progress. The construction period ends when the asset is substantially complete and ready for its intended use.

Expenditures for maintenance and repairs are charged to expense as incurred. Major replacements and betterments that improve or extend the life of the asset are capitalized and depreciated over their estimated useful lives. Depreciation is computed using the straight-line method over the estimated useful lives of the buildings and improvements, which are generally between five and 39 years.

The purchase of stores is considered an asset acquisition. As such, the purchase price is allocated to the real estate assets acquired based on their relative fair values, which are estimated using significant unobservable inputs. The value of the tangible assets, consisting of land and buildings, is determined as if vacant. Intangible assets, which represent the value of existing tenant relationships, are recorded at their relative fair values based on the avoided cost to replace the current leases. The Company measures the value of tenant relationships based on the rent lost due to the amount of time required to replace existing customers, which is based on the Company’s historical experience with turnover in its stores. Any debt assumed as part of the acquisition is recorded at fair value based on current interest rates compared to contractual rates. Acquisition-related transaction costs are capitalized as part of the purchase price.

Intangible lease rights represent: (1) purchase price amounts allocated to leases on three stores that cannot be classified as ground or building leases; these rights are amortized to expense over the life of the leases and (2) intangibles related to ground leases on nine stores where the leases were assumed by the Company at rates that were lower than the current market rates for similar leases. The values associated with these assumed leases were recorded as intangibles, which will be amortized over the lease terms.

Real Estate Sales

In general, sales of real estate and related profits/losses are recognized when all consideration has changed hands and risks and rewards of ownership have been transferred. Certain types of continuing involvement preclude sale treatment and related profit recognition; other forms of continuing involvement allow for sale recognition but require deferral of profit recognition.

Investments in Unconsolidated Real Estate Entities

Investments in unconsolidated real estate entities and cash distributions in unconsolidated real estate ventures represent the Company's noncontrolling interest in real estate joint ventures that own stores and the Company's interest in preferred stock of SmartStop Self Storage REIT, Inc. (“SmartStop”) and Strategic Storage Trust VI, Inc. (“Strategic Storage”), an affiliate of SmartStop. The Company’s investments in real estate joint ventures, where the Company has significant influence, but not control and joint ventures which are VIEs in which the Company is not the primary beneficiary, are recorded under the equity method of accounting in the accompanying consolidated financial statements.

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

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

recognized based on the Company’s ownership interest in the earnings of each of the unconsolidated real estate ventures. For the purposes of presentation in the statement of cash flows, the Company follows the “nature of distribution” approach for classification of distributions from joint ventures. Under this approach, cash flows are classified on the basis of the nature of the activity or activities of the investee that generated the distribution as either a return on investment (classified as a cash inflow from operating activities) or a return of investment (classified as a cash inflow from investing activities).

The Company evaluated its investment in preferred stock of non-public real estate entities and determined it did not have significant influence over the entity, and the investment in preferred stock does not have a readily determinable fair value, therefore it has been recorded at the transaction price. The Company periodically evaluates the investment for impairment. No impairments were recorded in our evaluations for any period presented herein.

Investments in Debt Securities and Notes Receivable

The Company accounts for its investment in debt securities and loans receivable at amortized cost. The Company recognizes interest income related to the debt securities and notes receivable using the effective interest method, with deferred fees and costs amortized over the lives of the related loans as yield adjustment.

Cash and Cash Equivalents

The Company’s cash is deposited with financial institutions located throughout the United States and at times may exceed federally insured limits. The Company considers all highly liquid debt instruments with a maturity date of three months or less to be cash equivalents.

Derivative Instruments and Hedging Activities

The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Risk Management and Use of Financial Instruments

In the normal course of its ongoing business operations, the Company encounters economic risk. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk on its interest-bearing liabilities. Credit risk is the risk of inability or unwillingness of tenants or bridge loan borrowers to make contractually required payments. Market risk is the risk of declines in the value of stores due to changes in rental rates, interest rates or other market factors affecting the value of stores held by the Company. The Company has entered into interest rate swap agreements and issued variable-rate bridge loans to manage a portion of its interest rate risk.

Redemption of Common Operating Partnership Units

The Company has the option to redeem common Operating Partnership Units in cash or shares of common stock. Redemption of common Operating Partnership units for shares of common stock, when redeemed under the original provisions of the Operating Partnership agreement, is accounted for by reclassifying the underlying net book value of the units from noncontrolling interest to the Company’s equity. Redemption of common Operating Partnership units for cash is accounted for by reducing the underlying net book value of the units from noncontrolling interest.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Revenue and Expense Recognition

Rental revenues are recognized as earned based upon amounts that are currently due from tenants. Leases are generally on month-to-month terms. Prepaid rents are recognized on a straight-line basis over the term of the leases. Promotional discounts are recognized as a reduction to rental income over the promotional period. Late charges, administrative fees and merchandise sales are recognized as income when earned.

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.

Property expenses, including utilities, property taxes, repairs and maintenance and other costs to manage the facilities are recognized as incurred. The Company accrues for property tax expense based upon invoice amounts and estimates. If these estimates are incorrect, the timing of expense recognition could be affected.

Tenant reinsurance premiums are recognized as revenue over the period of insurance coverage. Each tenant chooses the amount of insurance coverage they want through the tenant reinsurance program. Tenants can purchase policies in amounts up to ten thousand dollars of insurance coverage in exchange for a monthly fee. As of December 31, 2024, the total number of tenant insurance policies was 1.7 million, which was an aggregate coverage of approximately $5.3 billion. The Company’s exposure per claim is limited by the maximum amount of coverage chosen by each tenant.

Advertising Costs

The Company incurs advertising costs primarily attributable to digital and other advertising. These costs are expensed as incurred. The Company recognized $50,519, $32,795 and $19,285 in advertising expense for the years ended December 31, 2024, 2023 and 2022, respectively, which are included in property operating expenses on the Company’s consolidated statements of operations.

Income Taxes

The Company has elected to be treated as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). In order to maintain its qualification as a REIT, among other requirements, the Company is required to distribute at least 90% of its REIT taxable income to its stockholders and meet certain tests regarding the nature of its income and assets. As a REIT, the Company is not subject to U.S. federal income tax with respect to that portion of its income which meets certain criteria and is distributed annually to stockholders. The Company plans to continue to operate so that it meets the requirements for taxation as a REIT. Many of these requirements, however, are highly technical and complex. For any taxable year that the Company fails to qualify as a REIT and for which applicable statutory relief provisions did not apply, the Company would be subject to U.S. federal corporate income tax on all of its taxable income for at least that year and the ensuing four years. The Company is subject to certain state and local taxes. Provision for such taxes has been included in income tax expense on the Company’s consolidated statements of operations. For the year ended December 31, 2024, 0% (unaudited) of all distributions to stockholders qualified as a return of capital.

The Company owns and may acquire direct or indirect interests in entities that have elected or will elect to be taxed as REITs under the Internal Revenue Code (each, a “Subsidiary REIT”). A Subsidiary REIT is subject to the various REIT qualification requirements and other limitations described herein that are applicable to the Company. If a Subsidiary REIT were

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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

The Company has elected to treat certain corporate subsidiaries, including Extra Space Management, Inc. (“ESMI”), as a taxable REIT subsidiary (“TRS”). In general, a TRS may perform additional services for tenants and may engage in any real estate or non-real estate related business. A TRS is subject to U.S. federal corporate income tax and may also be subject to state and local income taxes. ESM Reinsurance Limited, a wholly-owned subsidiary of ESMI, generates income from insurance premiums that is subject to U.S. federal corporate income tax and state insurance premiums tax and pays certain insurance royalties to the Company.

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities. At December 31, 2024 and 2023, there were no material unrecognized tax benefits. Interest and penalties relating to uncertain tax positions will be recognized in income tax expense when incurred. As of December 31, 2024 and 2023, the Company had no interest or penalties related to uncertain tax provisions.

Stock-Based Compensation

The measurement and recognition of compensation expense for all share-based payment awards to employees and directors are based on estimated fair values. Awards granted are valued at fair value and any compensation expense is recognized over the service periods of each award.

Earnings Per Common Share

Basic earnings per common share is computed using the two-class method by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding during the period. All outstanding unvested restricted stock awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common stockholders; accordingly, they are considered participating securities that are included in the two-class method. Diluted earnings per common share measures the performance of the Company over the reporting period while giving effect to all potential common shares that were dilutive and outstanding during the period. The denominator includes the weighted average number of basic shares and the number of additional common shares that would have been outstanding if the potential common shares that were dilutive had been issued, and is calculated using the two-class, treasury stock or if-converted method, whichever is most dilutive. Potential common shares are securities (such as options, Series A Participating Redeemable Preferred Units (“Series A Units”), Series B Redeemable Preferred Units (“Series B Units”), Series D Redeemable Preferred Units (“Series D Units”) and together with the Series A Units and Series B Units, the (“Preferred OP Units") and common Operating Partnership units (“OP Units”)) that do not have a current right to participate in earnings of the Company but could do so in the future by virtue of their option, redemption or conversion right.

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

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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

			For the Year Ended December 31,
			2024						2023						2022
			Equivalent Shares (if converted)						Equivalent Shares (if converted)						Equivalent Shares (if converted)
Common OP Units			8,659,092						7,970,487						—
Series B Units			214,836						236,130						187,664
Series D Units			928,637						1,332,049						1,140,513
			9,802,565						9,538,666						1,328,177

For the purposes of computing the diluted impact on earnings per share of the potential exchange of Series A Units for common shares upon redemption, where the Company had the option to redeem in cash or shares and where the Company had stated the positive intent and ability to settle at least $101,700 of the instrument in cash (or net settle a portion of the Series A Units against the related outstanding note receivable), only the amount of the instrument in excess of $101,700 was considered in the calculation of shares contingently issuable for the purposes of computing diluted earnings per share as allowed by ASC 260-10-45-46. Accordingly, the number of shares included in the computation for diluted earnings per share related to the Series A Units in the relevant periods is equal to the number of Series A Units that were outstanding, with no additional shares included related to the $101,700 fixed amount.

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

			For the Year Ended December 31,
			2024						2023						2022
Net income attributable to common stockholders			$	854,681					$	803,198					$	860,688
Earnings and dividends allocated to participating securities			(1,495)						(1,230)						(1,201)
Earnings for basic computations			853,186						801,968						859,487
Income allocated to noncontrolling interest - Preferred Operating Partnership Units and Operating Partnership Units			—						—						50,706
Fixed component of income allocated to noncontrolling interest - Preferred Operating Partnership (Series A Units)			—						—						(2,288)
Net income for diluted computations			$	853,186					$	801,968					$	907,905
Weighted average common shares outstanding:
Average number of common shares outstanding - basic			211,575,240						169,216,989						134,050,815
OP Units			—						—						6,749,995
Series A Units			—						—						875,480
Shares related to dilutive stock options			2,440						3,893						5,098
Average number of common shares outstanding - diluted			211,577,680						169,220,882						141,681,388
Earnings per common share
Basic			$	4.03					$	4.74					$	6.41
Diluted			$	4.03					$	4.74					$	6.41

Recently Issued Accounting Standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07 – “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. The amended guidance requires the disclosure of incremental segment information, including significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and a reconciliation of segment profit or loss to net income. The title and position of the CODM must also be disclosed, along with how the CODM uses the reported measures to assess segment

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

performance and to allocate resources. Pursuant to this ASU, the footnotes to the Company's consolidated financial statements include incremental disclosures related to its two reportable segments: (1) self-storage operations and (2) tenant reinsurance. The Company has adopted this standard as of December 31, 2024. Refer to note 17 for further discussion of the Company's reportable segments.

In December 2023, the FASB issued ASU No. 2023-09 – “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The amended guidance focuses on providing more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. Pursuant to this ASU, the footnotes to the Company's consolidated financial statements may include incremental disclosures related to income taxes. This standard is effective for annual periods beginning after December 15, 2024, therefore, compliance with this ASU will be required beginning with the Company's annual report on Form 10-K for the year ending December 31, 2025, with early adoption permitted. The Company expects to adopt this ASU for its annual report on Form 10-K for the year ending December 31, 2025, and is continuing to research the impact of this amended guidance, however, does not expect this standard to have a material impact on its consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03 – “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)”. The guidance requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item. For any remaining items within each relevant expense caption, entities must provide a qualitative description of the nature of those expenses. The guidance also requires disclosure of the total amount of selling expenses and the entity’s definition of selling expenses. The guidance is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, therefore, compliance with this ASU will be required beginning with the Company's annual report on Form 10-K for the year ending December 31, 2027. The guidance may be applied prospectively or retrospectively, and early adoption is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

3. REAL ESTATE ASSETS

The components of real estate assets are summarized as follows:

			December 31, 2024						December 31, 2023
Land			$	4,994,642					$	4,904,705
Buildings, improvements and other intangibles			22,336,386						21,664,224
Right of use assets - finance lease			140,259						143,842
Intangible assets - tenant relationships			326,440						321,019
Intangible lease rights			27,743						27,743
			27,825,470						27,061,533
Less: accumulated depreciation and amortization			(3,339,136)						(2,624,405)
Net operating real estate assets			24,486,334						24,437,128
Real estate under development/redevelopment			101,293						118,745
Real estate assets, net			$	24,587,627					$	24,555,873
Real estate assets held for sale included in real estate assets, net			$	103,756					$	—

During the year ended December 31, 2024, the Company had 18 stores classified as held for sale. Of the 18 stores, 10 had an estimated fair value, net of selling costs, which was less than their net carrying value. As a result, during the year ended December 31, 2024, the Company recorded estimated losses of $63,250 on its consolidated statements of operations. This amount is shown net of the sale of a property which generated a gain of $37,344. As of December 31, 2024, the Company had 13 stores classified as held for sale which are included in real estate assets, net. Of the 13 stores, five had an estimated fair value, net of selling costs, of $43,107, which was less than the net carrying value of the assets. The loss on these stores is included in gain (loss) on real estate assets held for sale and sold, net. Assets held for sale are included in the self-storage operations segment of the Company’s segment information.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

In September 2024, the Company amended existing triple-net lease agreements for land and buildings related to 27 stores that had initially been entered into in June and August 2019. The Company also entered into new triple-net lease agreements for land and buildings related to 12 additional stores. Both the initial 27 stores and the additional 12 stores added to the triple net lease structure are categorized as operating leases and have been presented in real estate assets - operating lease right-of-use assets and operating lease liabilities on the Company's consolidated balance sheets.

The Company amortizes to expense intangible assets—tenant relationships on a straight-line basis over the average period that a tenant is expected to utilize the facility (currently estimated at 18 months). The Company amortizes to expense the intangible lease rights over the terms of the related leases. Amortization related to the tenant relationships and lease rights was $114,614, $59,807, and $13,981 for the years ended December 31, 2024, 2023 and 2022, respectively. The remaining balance of the unamortized lease rights will be amortized over the next four to 38 years. Accumulated amortization related to intangibles was $363,916 and $317,511 as of December 31, 2024 and 2023, respectively.

4. OTHER ASSETS

The components of other assets are summarized as follows:

			December 31, 2024						December 31, 2023
Goodwill			$	170,811					$	170,811
Receivables, net			129,748						134,716
Prepaid expenses and deposits			137,494						85,153
Other intangible assets, net			32,206						66,332
Trade name			—						50,000
Fair value of interest rate swaps			15,733						26,183
Equipment and fixtures, net			50,365						48,697
Deferred line of credit financing costs, net			7,548						9,787
Restricted cash			5,081						6,021
			$	548,986					$	597,700

During the year ended December 31, 2024, the Company decided to operate all stores under a single brand. As a result of that decision, the Company deemed the Life Storage trade name intangible asset to be impaired and recognized a loss for the full value of the asset. A loss of 51,763 for the write-off of the asset and related costs has been recorded in impairment of Life Storage trade name on the Company's consolidated statements of operations for the year ended December 31, 2024. The trade name was originally recorded at fair value based on royalty payments avoided had the trade name been owned by a third party. This was determined using market royalty rates and a discounted cash flow analysis under the relief-from-royalty method. Intangible assets are included in the self-storage operations segment of the Company’s segment information.

Depreciation of equipment and fixtures is computed on a straight-line basis over three to five years. The Company capitalizes certain costs during the application development stage when developing software for internal use. As of December 31, 2024 and 2023, unamortized software costs were $16,254 and $18,844. During the year ended December 31, 2024 and 2023, the Company recorded amortization expense of $5,307 and $5,377, respectively, relating to capitalized software costs.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

5. PROPERTY ACQUISITIONS AND DISPOSITIONS

The Life Storage Merger

On July 20, 2023, the Company closed its merger with Life Storage (the “Life Storage Merger”), which included 757 wholly-owned stores and one consolidated joint venture store. Under the terms of the Life Storage Merger, Life Storage stockholders and holders of units of the Life Storage operating partnership received 0.895 of a share of common stock (or OP Unit, as applicable) of the Company for each issued and outstanding share (or operating partnership unit) of Life Storage they owned for total equity consideration of $11,602,808, based on the Company's closing share price on July 19, 2023. At closing, the Company retired $1,160,000 in balances on Life Storage's line of credit which included $375,000 that Life Storage used to pay off its private placement notes in connection with the closing of the Life Storage Merger. The Company also paid off $32,000 in secured loans. On July 25, 2023, the Company completed obligor exchange offers and consent solicitations (together the “Exchange Offers”) related to Life Storage's various senior notes. Upon the closing of the Exchange Offers, a total of $2,351,100 of Life Storage's senior notes were exchanged for senior notes of the same tenor of Extra Space Storage L.P. The remaining Life Storage senior note balances which were not exchanged total $48,900 and no longer have any financial reporting requirements or covenants.

Consideration and Purchase Price Allocation

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

Consideration Type			July 20, 2023
Common stock			$	11,353,338
OP units			249,470
Cash for payoff of Life Storage credit facility and debt			1,192,000
Transaction Costs			55,318
Total consideration			$	12,850,127

The following table summarizes the estimated fair values assigned to the assets acquired and liabilities assumed:

			July 20, 2023
Real estate assets			$	14,587,735
Equity investment in joint venture partnerships			325,250
Cash and other assets			107,423
Intangible assets - other			82,000
Trade name			50,000
Unsecured senior notes			(2,106,866)
Accounts payable, accrued expenses and other liabilities			(191,077)
Noncontrolling interests			(4,338)
Fair value of net assets acquired			$	12,850,127

Fair Value Measurement

The estimated fair values of assets acquired and liabilities assumed were primarily based on information that was available as of the closing date of the Life Storage Merger. The methodology used to estimate the fair values to apply purchase accounting and the ongoing financial statement impact, if any, are summarized below:

• Real estate assets – Real estate assets acquired were recorded at fair value using standard valuation methodologies, including the cost and market approaches. The remaining useful lives for real estate assets, excluding land, were reset to 39 years. Tenant relationships for storage leases were recorded at fair value based on estimated costs the Company

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

avoided to replace them. Tenant relationships are amortized to expense over 18 months, which is based on the Company’s historical experience with turnover in its stores.

• Equity investment in joint venture partnerships - Equity investment in joint venture partnerships were recorded at fair value based on a direct capitalization of net operating income.

• Intangible assets - other – Customer relationships relating to tenant reinsurance contracts were recorded at fair value based on the income approach which estimates the potential revenue loss the Company avoided to replace them. These assets are amortized to expense over 36 months, which is based on the Company’s historical experience with average length of stay for tenants.

• Trade name – Trade names were recorded at fair value based on royalty payments avoided had the trade name been owned by a third party. This is determined using market royalty rates and a discounted cash flow analysis under the relief-from-royalty method. This method incorporates various assumptions, including projected revenue growth rates, the terminal growth rate, the royalty rate to be applied, and the discount rate utilized. The trade name is an indefinite lived asset and as such is not amortized. During the year ended December 31, 2024, the Company decided to operate all stores under a single brand. As a result of that decision, the Company deemed the Life Storage trade name intangible asset to be impaired and recognized a loss for the full value of the asset.

• Unsecured senior notes – Unsecured senior notes were recorded at fair value using readily available market data. The below-market value of debt is recorded as a debt discount and reported as a reduction of the unsecured senior notes, net balance on the consolidated balance sheets. The discount is amortized using the effective interest method as an increase to interest expense over the remaining terms of the unsecured senior notes.

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

The Company amortizes to expense intangible assets - other on a straight-line basis. The following table summarizes the accumulated amortization related to intangible assets - other:

			December 31, 2024						For the Year Ended December 31, 2024			For the Year Ended December 31, 2023
Intangible Assets:			Gross Carrying Amount			Accumulated Amortization			Amortization Expense			Amortization Expense
Intangible assets - other			$	82,000		$	49,819		$	34,124		$	15,695

			Estimated Aggregate Amortization Expense
Intangible Assets:			2025			2026
Intangible assets - other			$	19,833		$	11,569

Store Acquisitions

The following table shows the Company’s acquisitions of stores for the years ended December 31, 2024 and 2023. The table excludes purchases of raw land and improvements made to existing assets. All store acquisitions are considered asset acquisitions under ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.”

									Consideration Paid																											Total
Period			Number of Stores						Total						Cash Paid						Loan Assumed			Finance Lease Liability			Investments in Real Estate Ventures			Net Liabilities/ (Assets) Assumed			Value of Equity Issued						Real estate assets
Total 2024			58						$	584,168					$	479,059					$	—		$	—		$	1,853		$	2,842		$	100,414					$	584,168
Total 2023			14						$	147,729					$	135,577					$	12,000		$	—		$	—		$	152		$	—					$	147,729

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

On September 15, 2022, the Company completed the acquisition of multiple entities doing business as Storage Express for a purchase price of $590.0 million. A portion of the consideration paid was in the form of the issuance of 619,294 OP units (a total value of $125 million) and the remainder in cash. The portfolio included 106 operating stores and eight parcels of land for future development, all located in Illinois, Indiana, Kentucky and Ohio. This acquisition did not meet the definition of a business under ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” and was therefore recorded as an asset acquisition.

Other Investments

On June 1, 2022, the Company completed the acquisition of Bargold Storage Systems, LLC (“Bargold”) for a purchase price of approximately $179.3 million. Bargold leases space in apartment buildings, primarily in New York City and its boroughs, builds out the space as storage units, and subleases the units to tenants. As of June 1, 2022, Bargold had approximately 17,000 storage units with an approximate occupancy of 97%. This acquisition is considered a business combination under ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.”

The following table summarizes the total consideration transferred to acquire Bargold:

Total cash paid by the company			$	157,302
Fair value of Series D Units issued			16,000
Fair value of OP Units issued			6,000
Total consideration transferred			$	179,302

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

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

Cash and cash equivalents			$	175
Fixed assets			6,411
Developed technology			500
Trademarks			500
Customer relationships			1,870
Other assets			125
Accounts payables and accrued liabilities assumed			(1,090)
Nets asset acquired			8,491
Goodwill			170,811
Total assets acquired			$	179,302

The following table summarizes the revenues and earnings related to Bargold since the acquisition date of June 1, 2022, which are included in the Company's consolidated statement of operations for the year ended December 31, 2022:

Total revenues			$	9,374
Net income from operations			$	1,718

Pro Forma Information

As noted above, during the year ended December 31, 2022, the Company acquired Bargold. The following pro forma financial information is based on the combined historical financial statements of the Company and Bargold, however, only includes revenue and presents the Company's results as if the acquisition had occurred on January 1, 2022. Net income was excluded as it was impracticable to report expenses due to the lack of historical accrual basis accounting.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

			For the Year Ended December 31, 2022
			Pro Forma
Total revenues			$	1,930,816

Store Dispositions

During the year ended December 31, 2024, the Company closed on the sale of six stores for total consideration of $102,484. Five of the six stores had been classified as held for sale. The five stores previously held for sale had been written down, resulting in a loss of $33,662, while the sale of the sixth store resulted in a $37,344 gain. These amounts have been recognized on the Company's consolidated statements of operations at December 31, 2024, presented within gain (loss) on real estate assets held for sale and sold, net.

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

6. INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES

Investments in unconsolidated real estate entities and cash distributions in unconsolidated real estate ventures represent the Company's interest in preferred stock of SmartStop and Strategic Storage, an affiliate of SmartStop, and the Company's noncontrolling interest in real estate joint ventures. The Company accounts for its investments in SmartStop and Strategic Storage preferred stock, which do not have a readily determinable fair value, at the transaction price less impairment, if any. The Company accounts for its investments in joint ventures using the equity method of accounting. The Company initially records these investments at cost and subsequently adjusts for cash contributions, distributions and net equity in income or loss, which is allocated in accordance with the provisions of the applicable partnership or joint venture agreement.

In these joint ventures, the Company and the joint venture partner generally receive a preferred return on their invested capital. To the extent that cash or profits in excess of these preferred returns are generated through operations or capital transactions, the Company would receive a higher percentage of the excess cash or profits, as applicable, than its equity interest.

The Company separately reports investments with net equity less than zero in cash distributions in unconsolidated real estate ventures in the consolidated balance sheets. The net equity of certain joint ventures is less than zero because distributions have exceeded the Company's investment in and share of income from these joint ventures. This is generally the result of financing distributions, capital events or operating distributions that are usually greater than net income, as net income includes non-cash charges for depreciation and amortization while distributions do not.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Net investments in unconsolidated real estate entities and cash distributions in unconsolidated real estate ventures consist of the following:

			Number of Stores						Equity Ownership %						Excess Profit % (1)						December 31,
						2024						2023
PRISA Self Storage LLC			85						4%						4%						$	8,967					$	9,435
HF1 Sovran HHF Storage Holdings LLC (2)			37						49%						49%-59%						304,526						105,339
Storage Portfolio II JV LLC			36						10%						30%						(9,584)						(8,314)
Storage Portfolio IV JV LLC			32						10%						30%						47,150						48,184
Storage Portfolio I LLC			24						34%						49%						(43,803)						(42,487)
PR II EXR JV LLC			23						25%						25%						105,909						108,160
HF2 Sovran HHF Storage Holdings II LLC (2)			22						49%						49%-59%						114,034						41,613
HF5 Life Storage-HIERS Storage LLC			17						20%						20%						25,192						26,051
HF6 191 V Life Storage Holdings LLC			17						20%						20%						10,821						12,702
ESS-CA TIVS JV LP			16						55%						55%-65%						27,217						29,128
VRS Self Storage, LLC			16						45%						54%						(17,557)						(16,386)
HF10 Life Storage HHF Wasatch Holdings LLC			16						20%						20%						19,295						20,019
Other unconsolidated real estate ventures (3) (4)			119						10%-50%						10%-50%						314,852						317,104
SmartStop Self Storage REIT, Inc. Preferred Stock (6)			n/a						n/a						n/a						200,000						200,000
Strategic Storage Trust VI, Inc. Preferred Stock (5)			n/a						n/a						n/a						150,000						150,000
Net Investments in and Cash distributions in unconsolidated real estate entities			460																		$	1,257,019					$	1,000,548
Investments in unconsolidated real estate entities																					$	1,332,338					$	1,071,617
Cash distributions in unconsolidated real estate ventures																					(75,319)						(71,069)
Net Investments in and Cash distributions in unconsolidated real estate entities																					$	1,257,019					$	1,000,548

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

(2)In November 2024, the Company acquired additional ownership interest in HF1 Sovran HHF Storage Holdings LLC and HF2 Sovran HHF Storage Holdings II LLC from its partner in the unconsolidated joint ventures for cash consideration of $251,235. The transaction increased the equity ownership percentages from 20% and 15%, respectively, to 49% in each unconsolidated joint venture. The additional investment is presented on the Company's consolidated balance sheets under investments in unconsolidated real estate entities.

(3)In September 2024, the Company sold its membership interest in the Alan Jathoo JV LLC unconsolidated joint venture, which held nine stores, to its partner in such joint venture and recognized a gain of $3,406 on the transaction. This gain and the gain from the ESS Bristol Investments LLC transaction referenced below are presented in equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets and sale of a joint venture interest on the Company's consolidated statements of operations for the year ended December 31, 2024.

(4)In August 2024, the ESS Bristol Investments LLC unconsolidated joint venture sold five of its eight stores to another of the Company's unconsolidated joint ventures, and the Company recognized a gain of $10,324 for its pro rata share of the transaction. The Company then acquired its partner's membership interest in the remaining three stores held by ESS Bristol Investments LLC, which is now presented under real estate assets, net on the Company's consolidated balance sheets.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

(5)In May 2023, the Company invested $150,000 in shares of convertible preferred stock of Strategic Storage with a dividend rate of 8.35% per annum, subject to increase after five years. The preferred shares are generally not redeemable for three years, except in the case of a change of control or initial listing of Strategic Storage. Dividend income from this investment is included on the equity in earnings and dividend income from unconsolidated real estate entities on the Company's consolidated statements of operations.

(6)In October 2019, the Company invested $200,000 in shares of convertible preferred stock of SmartStop with a dividend rate of 6.25% per annum. On November 1, 2024, the dividend rate increased to 7.00% per annum, and is now subject to increase each year. The preferred shares are generally not redeemable for five years, except in the case of a change of control or initial listing of SmartStop. Dividend income from this investment is included on the equity in earnings and dividend income from unconsolidated real estate entities line on the Company's consolidated statements of operations.

Subsequent to year end, on February 4, 2025, the Company invested $100,000 in shares of newly issued convertible preferred stock of Strategic Storage Growth Trust III, Inc., an affiliate of SmartStop Self Storage REIT, Inc. The dividend rate for the preferred shares is 8.85% per annum, subject to increase after five years. The preferred shares are generally not redeemable for five years, except in the case of a change of control or initial listing, and are redeemable thereafter subject to a redemption premium.

In accordance with ASC 810, the Company reviews all of its joint venture relationships annually to ensure that there are no entities that require consolidation. As of December 31, 2024, there were no previously unconsolidated entities that were required to be consolidated as a result of this review. The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting.

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

			For the Year Ended December 31,
			2024						2023						2022
Equity in earnings of PRISA Self Storage LLC			$	3,212					$	3,320					$	3,272
Equity in earnings of HF1 Sovran HHF Storage Holdings LLC (1)			4,977						1,553						—
Equity in earnings of Storage Portfolio II JV LLC			2,661						3,094						3,398
Equity in earnings of Storage Portfolio IV JV LLC			1,440						1,319						917
Equity in earnings of Storage Portfolio I LLC			4,822						5,182						4,684
Equity in earnings of PR II EXR JV LLC			2,351						2,227						1,229
Equity in earnings of HF2 Sovran HHF Storage Holdings II LLC (1)			2,466						691						—
Equity in earnings of HF5 Life Storage-HIERS Storage LLC (1)			761						377						—
Equity in earnings of HF6 191 V Life Storage Holdings LLC (1)			(891)						(735)						—
Equity in earnings of ESS-CA TIVS JV LP			3,574						3,873						2,753
Equity in earnings of VRS Self Storage, LLC			5,186						5,253						5,401
Equity in earnings of HF10 Life Storage HHF Wasatch Holdings LLC (1)			598						40						—
Equity in earnings of other minority owned stores (1)			10,847						7,740						7,265
Dividend income from SmartStop preferred stock			12,755						12,500						12,509
Dividend income from Strategic Storage preferred stock			12,513						8,401						—
			$	67,272					$	54,835					$	41,428

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

Equity in earnings of certain of our joint ventures includes the amortization of the Company’s excess purchase price of $60,253 of these equity investments over its original basis. The excess basis is amortized over 39 years.

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

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

7. INVESTMENTS IN DEBT SECURITIES AND NOTES RECEIVABLE

Investments in debt securities and notes receivable consists of the Company's investment in mandatorily redeemable preferred stock of Jernigan Capital, Inc. (“JCAP”) in connection with JCAP's acquisition by affiliates of NexPoint Advisors, L.P. (“NexPoint”) and receivables due to the Company under its bridge loan program. Information about these balances is as follows:

			December 31, 2024						December 31, 2023
Debt securities - Preferred Stock			$	300,000					$	300,000
Notes Receivable - Bridge Loans			1,244,575						594,727
Dividends and Interest Receivable			6,375						10,042
			$	1,550,950					$	904,769

In November 2020, the Company invested $300,000 in the preferred stock of JCAP in connection with the acquisition of JCAP by NexPoint. This investment consisted of 200,000 Series A Preferred Shares valued at a total of $200,000, and 100,000 Series B Preferred Shares valued at a total of $100,000. In December 2022, the Company completed a modification with Nexpoint Storage Partners (as successor in interest to JCAP) that exchanged the Series A and Series B Preferred Shares for 300,000 Series D Preferred Shares, valued at a total of $300,000. The Series D Preferred Shares are mandatorily redeemable after six years from the modification in December 2022, with two one-year extension options. NexPoint may redeem the Series D Preferred Shares at any time, subject to certain prepayment penalties. The Company accounts for the Series D Preferred Shares as a held to maturity debt security at amortized cost and evaluates whether the fair value is below the amortized cost basis at each reporting period. The Series D Preferred Shares have an initial dividend rate of 8.5%. If the investment is not retired after six years, the preferred dividends increase annually.

In July 2020, the Company purchased a senior mezzanine note receivable with a principal amount of $103,000. The note receivable bore interest at 5.5%, with a maturity in December 2023 and was collateralized through an equity interest in which it or its subsidiaries wholly own 62 storage facilities. The Company paid cash of $101,142 for the note receivable and accounted for the discount at amortized cost. The discount was being amortized over the term of the note receivable. In February 2022, a junior mezzanine lender exercised its right to buy the Company’s position for the full principal balance plus interest due, as a result of which the Company sold this note for a total of $103,315 in cash. The remaining unamortized discount was recognized in that quarter as interest income.

The Company offers bridge loan financing to certain of its third-party self-storage owners. These notes receivable consist of mortgage loans receivable, which are collateralized by self-storage properties that the Company manages, and mezzanine loans receivable, which are secured by equity interest pledges. As of December 31, 2024, 74% of the notes held are mortgage receivables. The Company may sell a portion of the mortgage receivables. These notes receivable typically have a term of three years with two one-year extensions and have variable interest rates. During the year ended December 31, 2024, the Company sold a total principal amount of $183,632 of its mortgage bridge loans receivable to third parties for a total of $183,632 in cash, closed on $845,760 in initial loan draws, and recorded $54,545 of draws for interest payments.

The bridge loans typically have a loan to value ratio between 70% and 80% at origination. During the year ended December 31, 2024, one of the notes receivable entered nonaccrual status. Subsequent to year end, the Company purchased the property that collateralized the note, which was paid off at the time of close, with no gain or loss recognized. No other notes receivable are in past-due or nonaccrual status. The allowance for potential credit losses is immaterial.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

8. DEBT

The components of term debt are summarized as follows:

Term Debt			December 31, 2024						December 31, 2023
Secured notes payable (1)			$	1,013,661					$	1,279,105
Unsecured term loans			2,200,000						2,660,000
Unsecured senior notes			8,025,000						6,725,000
Total			11,238,661						10,664,105
Less: Discount on unsecured senior notes, net (2)			(222,254)						(274,350)
Less: Unamortized debt issuance costs			(56,391)						(55,007)
Total			$	10,960,016					$	10,334,748
(1) The loans are collateralized by mortgages on real estate assets and the assignment of rents.
(2) Unsecured senior notes from the Life Storage Merger were recorded at fair value, resulting in a discount to be amortized over the term of the debt.

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

2025			$	780,922
2026			1,409,467
2027			1,311,163
2028			1,627,800
2029			1,516,380
2030			1,342,929
2031			1,650,000
2032			600,000
2033			—
2034			600,000
Thereafter			400,000
Total			$	11,238,661

On November 20, 2024, the Company established a commercial paper note program. Under the terms of the program, the Company may issue up to $1 billion of unsecured commercial paper notes that bear interest at variable rates with a maturity of varying amounts (generally 30 days or less, with a maximum of 397 days). The commercial paper notes are issued under customary terms in the commercial paper market and are issued at a discount from par or, alternatively, can be issued at par and bear varying interest rates on a fixed or floating basis. The net proceeds from the issuances of the notes will be used for general working capital and other general corporate purposes. General corporate purposes may include, but are not limited to, the repayment of other debt and selective development, redevelopment, or acquisition of properties. Outstanding commercial paper notes have been included in revolving lines of credit and commercial paper on the Company's consolidated balance sheets. The commercial paper notes sold during the year ended December 31, 2024 had a weighted-average maturity term of 20 days. At December 31, 2024, there were $500 million in issuances outstanding under the commercial paper program.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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

			As of December 31, 2024
Revolving Lines of Credit and Commercial Paper			Amount Drawn						Capacity						Interest Rate						Maturity						Basis Rate (1)
Secured credit line			$	25,000					$	140,000					5.8%						7/1/2026						SOFR plus 1.35%
Unsecured credit line (2)			837,000						2,000,000						5.4%						6/22/2027						SOFR plus 0.875%
Commercial paper			500,000						1,000,000						4.8% (3)						Various
			$	1,362,000					$	3,140,000
(1) Daily Simple Secured Overnight Financing Rate (“SOFR”) for credit lines.
(2) Basis Rate as of December 31, 2024. Rate is subject to change based on the Company's investment grade rating.
(3) Commercial paper interest rate is variable based on market rates at the time of each issuance. Therefore, interest rate shown in the table above is a weighted average interest rate.

On June 22, 2023, the Company entered into the Third Amended and Restated Credit Agreement (the “Credit Agreement”). Pursuant to the terms of the Credit Agreement, the Company may request an extension of the term of the revolving credit facility for up to two additional periods of six months each, after satisfying certain conditions. On August 11, 2023, the capacity was increased by $60 million.

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

As of December 31, 2024, amounts outstanding under the revolving credit facility bore interest at floating rates, at the Company’s option, equal to either (i) Adjusted Term or Daily Simple SOFR plus the applicable margin or (ii) the applicable base rate which is the applicable margin plus the highest of (a) 0.0%, (b) the federal funds rate plus 0.50%, (c) U.S. Bank’s prime rate or (d) the SOFR rate plus 1.00%. Per the Credit Agreement, the applicable SOFR rate margin and applicable base rate margin are based on the Company’s achieved debt rating, with the SOFR rate margin ranging from 0.7% to 2.2% per annum and the applicable base rate margin ranging from 0.00% to 1.20% per annum.

The Credit Agreement is guaranteed by the Company and is not secured by any assets of the Company. The Company's unsecured debt is subject to certain financial covenants. As of December 31, 2024, the Company was in compliance with all of its financial covenants.

As of December 31, 2024, the Company’s percentage of fixed-rate debt to total debt was 75.8%. The weighted average interest rates of the Company’s fixed and variable-rate debt were 4.1% and 5.4%, respectively. The combined weighted average interest rate was 4.4%.

9. DERIVATIVES

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash payments principally related to the Company’s borrowings.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (“OCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. A portion of these changes is excluded from accumulated other comprehensive income as it is allocated to noncontrolling interests. During the years ended December 31, 2024, 2023 and 2022, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. During 2025, the Company estimates that $9,869 will be reclassified as an increase to interest income.

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

Hedge Product						Range of Notional Amounts						Strike						Effective Dates						Maturity Dates
Swap Agreements						$32,000 - $245,000						0.96% - 4.33%						11/30/2022 - 7/14/2025						1/30/2025 - 2/1/2028

Fair Values of Derivative Instruments

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

			Asset / Liability Derivatives
Derivatives designated as hedging instruments:			December 31, 2024						December 31, 2023
Other assets			$	15,733					$	26,183
Other liabilities			$	710					$	5,030

Effect of Derivative Instruments

The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of operations for the periods presented. No tax effect has been presented as the derivative instruments are held by the Company:

						Gain (loss) recognized in OCI for the Year Ended December 31,												Location of amounts reclassified from OCI into income						Gain (loss) reclassified from OCI for the Year Ended December 31,
Type						2024						2023						2024						2023						2022
Swap Agreements						$	22,141					$	8,730					Interest expense						$	26,885					$	41,541					$	(7,877)

Credit-Risk-Related Contingent Features

The Company has agreements with some of its derivative counterparties that contain provisions pursuant to which the Company could be declared in default of its derivative obligations if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender.

The Company also has an agreement with some of its derivative counterparties that incorporates the loan covenant provisions of the Company’s indebtedness with a lender affiliate of the derivative counterparty. Failure to comply with the loan covenant provisions would result in the Company being in default on any derivative instrument obligations covered by the agreement.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

As of December 31, 2024, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk related to these agreements, was immaterial. As of December 31, 2024, the Company had not posted any collateral related to these agreements. If the Company had breached any of these provisions as of December 31, 2024, it could have been required to cash settle its obligations under these agreements at their termination value.

10. STOCKHOLDERS’ EQUITY

The Company’s charter provides that it can issue up to 500,000,000 shares of common stock, $0.01 par value per share and 50,000,000 shares of preferred stock, $0.01 par value per share. As of December 31, 2024, 211,995,510 shares of common stock were issued and outstanding, and no shares of preferred stock were issued or outstanding.

All holders of the Company's common stock are entitled to receive dividends and to one vote on all matters submitted to a vote of stockholders. The transfer agent and registrar for the Company’s common stock is Broadridge Corporate Issuer Solutions, LLC.

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

On April 15, 2024, the Company filed its $800,000 “at the market” equity program with the Securities and Exchange Commission using a shelf registration statement on Form S-3, and entered into an equity distribution agreement with nine sales agents. No shares have been sold under the current “at the market” equity program, and no shares were sold under the previous “at the market” equity program, which spanned from August 9, 2021 through April 14, 2024.

On November 13, 2023, the Company's board of directors authorized a share repurchase program allowing for the repurchase of shares with an aggregate value up to $500,000. During the year ended December 31, 2023 and the year ended December 31, 2024, no shares were repurchased. As of December 31, 2024, the Company had remaining authorization to repurchase shares with an aggregate value up to $500,000.

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

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

11. NONCONTROLLING INTEREST REPRESENTED BY PREFERRED OPERATING PARTNERSHIP UNITS

Classification of Noncontrolling Interests

GAAP requires a company to present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section, but separate from the company’s equity. It also requires the amount of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations and requires changes in ownership interest to be accounted for similarly as equity transactions. If noncontrolling interests are determined to be redeemable, they are to be carried at their redemption value as of the balance sheet date and reported as temporary equity.

The Company has evaluated the terms of the Operating Partnership’s preferred units and classifies the noncontrolling interest represented by such preferred units as stockholders’ equity in the accompanying consolidated balance sheets. The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling interest as permanent equity in the consolidated balance sheets. Any noncontrolling interests that fail to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (1) the carrying amount and (2) the redemption value as of the end of the period in which the determination is made.

At December 31, 2024 and December 31, 2023, the noncontrolling interests represented by the Preferred OP Units qualified for classification as permanent equity on the Company's consolidated balance sheets. The partnership agreement of the Operating Partnership (as amended, the “Partnership Agreement”) provides for the designation and issuance of the OP Units. The balances for each of the specific Preferred OP units as presented in the Statement of Noncontrolling Interests and Equity as of the periods indicated are as follows:

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

			December 31, 2024						December 31, 2023
Series B Units			$	33,567					$	33,567
Series D Units			42,525						188,793
			$	76,092					$	222,360

Series A Participating Redeemable Preferred Units

The Partnership Agreement provides for the designation and issuance of the Series A Units. The Series A Units have priority over all other partnership interests of the Operating Partnership with respect to distributions and liquidation. As of December 31, 2024 and December 31, 2023, there were no outstanding Series A Units.

Series B Redeemable Preferred Units

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

The Series B Units were issued in 2013 and 2014. The Series B Units have a liquidation value of $25.00 per unit for a fixed liquidation value of $33,567 which represents 1,342,727 Series B Units outstanding at December 31, 2024. Holders of the Series B Units receive distributions at an annual rate of 6.0%. These distributions are cumulative. The Series B Units become redeemable at the option of the holder on the first anniversary of the date of issuance, which redemption obligation may be satisfied at the Company’s option in cash or shares of its common stock.

Series C Redeemable Preferred Units

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

junior to the Series A Units, on parity with the Series B Units and Series D Units, and senior to all other partnership interests of

the Operating Partnership with respect to distributions and liquidation. As of December 31, 2024 and December 31, 2023, there were no outstanding Series C Units.

Series D Redeemable Preferred Units

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

The Series D Units have a liquidation value of $25.00 per unit, for a fixed liquidation value of $42,525, which represents 1,700,989 Series D Units outstanding at December 31, 2024. Holders of the Series D Units receive distributions at an annual rate between 3.0% and 5.0%. These distributions are cumulative. The Series D Units become redeemable at the option of the holder on the first anniversary of the date of issuance, which redemption obligation may be satisfied at the Company’s option in cash or shares of its common stock. In addition, certain of the Series D Units are exchangeable for OP Units at the option of the holder until the tenth anniversary of the date of issuance, with the number of OP Units to be issued equal to $25.00 per Series D Unit, divided by the value of a share of common stock as of the exchange date.

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

On October 1, 2024, 3,507,844 Series D Units were liquidated and returned to the Company. In exchange, the former holders of the Series D Units were issued notes totaling $87,696, which represented the total liquidation value of the Units, due on January 1, 2050. Interest will be paid to the former Unit holders quarterly, commencing December 31, 2024, at the existing rate of 3.35%. The full liquidation value was reclassified from noncontrolling interest represented by preferred operating partnership units to other liabilities on the Company's consolidated balance sheets.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

On December 27, 2024, 1,100,734 Series D Units were converted to 183,398 Common OP Units. As a result $27,518 was moved from noncontrolling interest represented by preferred operating partnership units to noncontrolling interests in operating partnership, net and other noncontrolling interests on the Company's consolidated balance sheets.

In January 2023, 890,594 Series D units were redeemed for 154,307 shares of common stock. In November 2023, 15,093 Series D units were redeemed for cash of $377.

The Series D Units have been issued at various times from 2014 to 2022. On June 1, 2022, the Operating Partnership

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

12. NONCONTROLLING INTEREST IN OPERATING PARTNERSHIP AND OTHER NONCONTROLLING INTERESTS

Noncontrolling Interest in Operating Partnership

The Company’s interest in its stores is held through the Operating Partnership. Between its general partner and limited partner interests, the Company held a 95.6% ownership interest in the Operating Partnership as of December 31, 2024. The remaining ownership interests in the Operating Partnership (including Preferred OP Units) of 4.4% are held by certain former owners of assets acquired by the Operating Partnership. As of December 31, 2023, the noncontrolling interest in the Operating Partnership is shown on the balance sheet net of a note receivable of $1,900 because a borrower under the note receivable was also a holder of OP Units. This note receivable originated in December 2014, bore interest at 5.0% per annum and matured on December 15, 2024. As of December 31, 2024, the noncontrolling interest in the Operating Partnership is shown on the balance sheet net of a new note receivable of $50,000 because a borrower under the note receivable is also a holder of OP Units. This note receivable originated in December 2024, bears interest at 10% per annum and matures on December 30, 2025.

The noncontrolling interest in the Operating Partnership represents OP Units that are not owned by the Company. OP Units are redeemable at the option of the holder, which redemption may be satisfied at the Company's option in cash, based upon the fair market value of an equivalent number of shares of the Company’s common stock (based on the ten-day average trading price) at the time of the redemption, or shares of the Company's common stock on a one-for-one basis, subject to anti-dilution adjustments provided in the Operating Partnership Agreement. As of December 31, 2024, the ten-day average closing price of the Company's common stock was $148.35 and there were 9,353,941 OP Units outstanding. Assuming that all of the OP Unit holders exercised their right to redeem all of their OP Units on December 31, 2024 and the Company elected to pay the OP Unit holders cash, the Company would have paid $1,387,657 in cash consideration to redeem the units.

OP Unit activity is summarized as follows for the periods presented:

			For the Year Ended December 31,
			2024			2023			2022
OP Units redeemed for common stock			323,191			2,803			—
OP Units redeemed for cash			15,481			1,000			24,824
Cash paid for OP Units redeemed			$	2,341		$	108		$	4,617
OP Units issued in conjunction with business combination, acquisitions, and preferred unit conversion			807,019			1,674,748			711,037
Value of OP Units issued in conjunction with business combination, acquisitions, and preferred unit conversion			$	127,932		$	249,470		$	141,000

GAAP requires a company to present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section but separate from the Company’s equity. It also requires the amount of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations and requires changes in ownership interest to be accounted for similarly as equity transactions. If noncontrolling interests are determined to be redeemable, they are to be carried at their redemption value as of the balance sheet date and reported as temporary equity.

The Company has evaluated the terms of the OP Units and classifies the noncontrolling interest represented by the OP Units as stockholders’ equity in the accompanying consolidated balance sheets. The Company will periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling amount as permanent equity in the

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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

Other Noncontrolling Interests

Other noncontrolling interests represent the ownership interest of partners in ten consolidated joint ventures as of December 31, 2024. There are a total of 14 stores in consolidated joint ventures, nine of which are operating and the other five of which are under development. The voting interests of the partners are 17.0% or less.

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

13. LEASES

Lessee Accounting

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

During the year ended December 31, 2024, the Company recorded no new finance lease right-of-use assets and finance lease liabilities.

The Company is lessee under several types of lease agreements. Generally, these leases fall into the following categories:

• Leases of real estate at 77 stores classified as wholly-owned or in consolidated joint ventures. These leases generally have original lease terms between 10-99 years. Under these leases, the Company typically has the option to extend the lease term for additional terms of 5-35 years.

• Leases of its corporate offices and call center. These leases have original lease terms between five and 14 years, with no extension options. In 2021 the Company modified and extended the lease of its corporate offices to add additional space and extend the lease until 2034.

• Leases of 21 regional offices. These leases have original lease terms between two and five years. The Company has the option on certain of these leases to extend the lease term for up to three additional years.

• Leases of small district offices. These leases generally have terms of 12 months or less. The Company has made an election to account for these under the short-term lease exception outlined under ASC 842. Therefore, no lease assets or liabilities are recorded related to these leases.

The Company has included lease extension options in the lease term for calculations of its right-of-use assets and liabilities related to the real estate asset leases at its stores when it is reasonably certain that the Company plans to extend the lease terms as the options arise.

Several of the leases of real estate at the Company’s stores include escalation clauses based on an index or rate, such as the Consumer Price Index (CPI). The Company included these lease payments in its calculations of right-of-use assets and liabilities based on the prevailing index or rate as of the adoption date. The Company will recognize changes to these variable lease payments in earnings in the period of change.

One of the real estate leases includes variable lease payments that are based upon a percentage of gross revenues. Certain other leases include additional variable payments relating to a percentage of sales in excess of a specified amount, common area maintenance, property taxes, and similar items. These payments are variable lease payments that do not depend on an index or rate and are excluded from the measurement of the lease liabilities and right-of-use-assets for these leases. The Company will recognize costs from these variable lease payments in the period in which the obligation for those payments is incurred.

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available surrounding the Company’s unsecured borrowing rates and implied secured spread at the lease

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

commencement date in determining the present value of lease payments. These discount rates vary depending on the term of the specific leases.

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

			For the Year Ended December 31,
			2024						2023
Finance lease cost:
Amortization of finance lease right-of-use assets			$	4,018					$	3,961
Interest expense related to finance lease liabilities			4,722						4,483
Operating lease cost			42,560						35,783
Variable lease cost			16,005						11,632
Short-term lease cost			24						24
Total lease cost			$	67,329					$	55,883
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows for finance lease payments			$	4,440					$	4,483
Operating cash outflows for operating lease payments			29,705						29,234
Total cash flows for lease liability measurement			$	34,145					$	33,717
Right-of-use assets obtained in exchange for new operating lease liabilities			$	486,266					$	265
Right-of-use assets obtained in exchange for new finance lease liabilities			$	—					$	—
Weighted average remaining lease term - finance leases (years)			55.00						54.00
Weighted average remaining lease term - operating leases (years)			24.00						18.68
Weighted average discount rate - finance leases			3.32		%				3.31		%
Weighted average discount rate - operating leases			5.73		%				3.91		%

The following table presents information about the Company’s undiscounted cash flows on an annual basis for operating and finance leases, including a reconciliation of the undiscounted cash flows to the finance lease and operating lease liabilities recognized in the Company’s consolidated balance sheets:

			Operating						Finance						Total
2025			$	47,392					$	6,571					$	53,963
2026			48,322						6,715						55,037
2027			48,724						6,842						55,566
2028			49,186						6,955						56,141
2029			49,863						7,094						56,957
Thereafter			1,129,756						346,684						1,476,440
Total			$	1,373,243					$	380,861					$	1,754,104
Present value adjustments (Less: future interest expense)			(667,398)						(239,078)						(906,476)
Lease liabilities			$	705,845					$	141,783					$	847,628

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Lessor Accounting

The Company's property rental revenue is primarily related to rents received from tenants at its operating stores. The Company's leases with its self-storage tenants are generally on month-to-month terms, include automatic monthly renewals, allow flexibility to increase rental rates over time as market conditions permit, and provide for the collection of contingent fees such as late fees. These leases do not include any terms or conditions that allow the tenants to purchase the leased space. All self-storage leases for which the Company acts as lessor have been classified as operating leases. The real estate assets related to the Company's stores are included in real estate assets, net on the Company's consolidated balance sheets and are presented at historical cost less accumulated depreciation and impairment, if any. Rental income related to these operating leases is included in property rental revenue on the Company's consolidated statements of operations, and is recognized each month as part of the month-to-month terms at the rental rate in place during each month.

14. STOCK-BASED COMPENSATION

As of December 31, 2024, 156,341 shares were available for issuance under the Company’s 2015 Incentive Award Plan (the “Plan”).

Options are exercisable once vested. Options are exercisable at such times and subject to such terms as determined by the Compensation Committee, but under no circumstances may be exercised if such exercise would cause a violation of the ownership limit in the Company’s charter. Options expire 10 years from the date of grant. All of the Company's remaining outstanding options were exercised during the year ended December 31, 2024.

As defined under the terms of the Plan, restricted stock grants may be awarded. The stock grants are subject to a vesting period over which the restrictions are released and the stock certificates are given to the grantee. During the vesting period, the grantee is not permitted to sell, transfer, pledge, encumber or assign shares of restricted stock granted under the Plan; however, the grantee has the ability to vote the shares and receive nonforfeitable dividends paid on shares. Unless otherwise determined by the Compensation Committee at the time of grant, the forfeiture and transfer restrictions on the shares lapse over a one-year period or a four-year period beginning on the date of grant.

Option Grants

A summary of stock option activity is as follows:

Options			Number of Shares						Weighted Average Exercise Price
Outstanding at December 31, 2021			9,272						$	82.47
Exercised			—						—
Outstanding at December 31, 2022			9,272						$	82.47
Exercised			—						—
Outstanding at December 31, 2023			9,272						$	82.47
Exercised			(9,272)						82.47
Outstanding at December 31, 2024			—						$	—

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

There have been no options granted since 2016. The Company recorded no compensation expense relating to outstanding options in general and administrative expense for the years ended December 31, 2024, 2023 and 2022. Net proceeds received for the years ended December 31, 2024, 2023 and 2022, related to option exercises was $765, $0 and $0, respectively. At December 31, 2024, there was no unrecognized compensation expense related to non-vested stock options under the Plan.

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Common Stock Granted to Employees and Directors

The Company recorded $16,808, $14,205 and $12,086 of expense in general and administrative expense in its statement of operations related to restricted stock awards granted to employees and directors for the years ended December 31, 2024, 2023 and 2022, respectively. The forfeiture rate, which is estimated at a weighted-average of 6.4% of unvested awards outstanding as of December 31, 2024, is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimates. At December 31, 2024 there was $23,044 of total unrecognized compensation expense related to non-vested restricted stock awards under the Plan. That cost is expected to be recognized over a weighted-average period of 2.15 years. The fair value of common stock awards is determined based on the closing trading price of the Company’s common stock on the grant date.

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

Restricted Stock Grants			Shares						Weighted-Average Grant-Date Fair Value
Unreleased at December 31, 2021			199,778						$	115.16
Granted			105,677						201.12
Released			(86,781)						112.31
Canceled			(10,614)						147.03
Unreleased at December 31, 2022			208,060						$	158.38
Granted			98,263						158.04
Released			(90,662)						147.21
Canceled			(10,084)						165.36
Unreleased at December 31, 2023			205,577						$	162.81
Granted			142,324						147.87
Released			(93,453)						153.78
Canceled			(6,365)						155.37
Unreleased at December 31, 2024			248,083						$	157.84

Performance-based Stock Units

The performance-based stock units (the “PSUs”) granted to executives represent the right to earn shares of the Company's common stock. These awards have two financial performance components: (1) the Company's core FFO performance (“FFO Target”), and (2) the Company's total stockholder return relative to the performance of a defined group of peers (“TSR Target”). Each of these performance components are weighted 50% and are measured over the performance period, which is defined as the three-year period ending December 31 from the year of grant. At the end of the performance period, the financial performance components are reviewed to determine the number of shares actually granted to executives, which can be as low as zero shares and up to a maximum of two shares issued for each PSU. A summary of the PSU activity is as follows:

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Performance-Based Stock Units						Units						Weighted-Average Grant-Date Fair Value
Unvested at December 31, 2021						135,408						$	111.69
Granted						61,085						223.96
Released						(49,334)						$	194.21
Unvested at December 31, 2022						147,159						$	130.63
Granted						86,795						207.28
Released						(45,242)						$	162.18
Unvested at December 31, 2023						188,712						$	158.32
Granted						115,283						161.82
Released						(40,832)						$	143.36
Unvested at December 31, 2024						263,163						$	162.17

The Company recorded $12,183, $12,433 and $9,299 of expense in general and administrative expense in its statement of operations related to PSUs granted to employees for the years ended December 31, 2024, 2023 and 2022, respectively. The Company estimated the fair value of the PSUs as of the grant date, using the closing trading price of the Company's common stock on the grant date to value the FFO Target portion. A Monte Carlo simulation model was used to calculate the fair value of the TSR Target portion of the PSUs, using the following assumptions:

						For the Year Ended December 31,
						2024						2023						2022
Intrinsic value						$39,369						$30,256						$21,659
Risk-free rate						5.5%						4.6%						1.8%
Volatility						29.9%						29.3%						29.3%
Expected term (in years)						2.8						2.8						2.9
Dividend yield						—%						—%						—%
Unrecognized compensation cost						$19,642						$18,798						$13,241
Term over which compensation cost recognized (in years)						3						3						3

Under the terms of the PSUs, dividends for the entire measurement period are paid in cash when the shares are released, therefore, a dividend yield of zero was used. The valuation model applied in this calculation utilizes subjective assumptions that could potentially change over time, including the probabilities associated with achieving the FFO Targets (categorized within Level 3 of the fair value hierarchy). Therefore, the amount of unrecognized compensation expense at December 31, 2024 noted above does not necessarily represent the expense that will ultimately be realized by the Company in the statement of operations.

15. EMPLOYEE BENEFIT PLAN

The Company has a retirement savings plan under Section 401(k) of the Internal Revenue Code under which eligible employees can contribute up to 60% of their annual salary, subject to a statutory prescribed annual limit. For the years ended December 31, 2024, 2023 and 2022, the Company made matching contributions to the plan of $8,145, $6,576, and $5,169 respectively, based on 100% of the first 3% and up to 50% of the next 2% of an employee’s compensation.

16. INCOME TAXES

As a REIT, the Company is generally not subject to U.S. federal income tax with respect to that portion of its income which is distributed annually to its stockholders. However, the Company has elected to treat certain of its corporate subsidiaries, including Extra Space Management, Inc., as a TRS. In general, a TRS may perform additional services for tenants and generally may engage in any real estate or non-real estate related business. A TRS is subject to U.S. federal corporate income tax and may be subject to state and local income taxes. The Company accounts for income taxes in accordance with the provisions of ASC 740, “Income Taxes.” Deferred tax assets and liabilities are determined based on differences between

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

financial reporting and tax bases of assets and liabilities. The Company has elected to use the Tax-Law-Ordering approach to determine when excess tax benefits will be realized.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act (“IRA”). The provisions include the new Corporate Alternative Minimum Tax (“CAMT”) and an excise tax on stock buybacks, each effective beginning in tax year 2023, as well as significant tax incentives for energy and climate initiatives. The Company has evaluated the impact of these provisions and does not expect the enactment of these provisions to have a material impact on the Company's consolidated financial statements.

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

			For the Year Ended December 31, 2024
			Federal						State						Total
Current expense			$	37,320					$	6,951					$	44,271
Tax credits/true-up			(9,413)						—						(9,413)
Change in deferred expense/(benefit)			(3,236)						1,856						(1,380)
Total tax expense			$	24,671					$	8,807					$	33,478

			For the Year Ended December 31, 2023
			Federal						State						Total
Current expense			$	26,516					$	6,035					$	32,551
Tax credits/true-up			(7,742)						—						(7,742)
Change in deferred expense			(4,151)						901						(3,250)
Total tax expense			$	14,623					$	6,936					$	21,559

			For the Year Ended December 31, 2022
			Federal						State						Total
Current expense			$	20,592					$	4,546					$	25,138
Tax credits/true-up			(6,071)						31						(6,040)
Change in deferred benefit			1,909						(82)						1,827
Total tax expense			$	16,430					$	4,495					$	20,925

A reconciliation of the statutory income tax provisions to the effective income tax provisions for the periods indicated is as follows:

			For the Year Ended December 31,
			2024												2023												2022
Expected tax at statutory rate			$	196,102					21.0		%				$	183,111					21.0		%				$	197,887					21.0		%
Non-taxable REIT income			(161,989)						(17.3)		%				(161,316)						(18.5)		%				(172,966)						(18.4)		%
State and local tax expense - net of federal benefit			8,851						0.9		%				8,779						1.0		%				4,160						0.4		%
Change in valuation allowance			—						—		%				(1,148)						(0.1)		%				(1,093)						(0.1)		%
Tax credits/true-up			(9,413)						(1.0)		%				(7,742)						(0.9)		%				(6,040)						(0.6)		%
Miscellaneous			(73)						—		%				(125)						—		%				(1,023)						(0.1)		%
Total provision			$	33,478					3.6		%				$	21,559					2.5		%				$	20,925					2.2		%

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

The major sources of temporary differences stated at their deferred tax effects are as follows:

			December 31, 2024						December 31, 2023
Deferred tax liabilities:
Fixed assets			$	(34,846)					$	(36,572)
Operating and Finance lease right-of-use assets			(6,495)						(6,831)
Other			(13,903)						(10,797)
State deferred taxes			(7,304)						(4,564)
Total deferred tax liabilities			(62,548)						(58,764)
Deferred tax assets:
Captive insurance subsidiary			2,119						509
Accrued liabilities			3,196						3,015
Stock compensation			4,787						3,961
Operating and Finance lease liabilities			9,249						9,013
Other			1,539						502
State deferred taxes			643						2,581
Total deferred tax assets			21,533						19,581
Net deferred income tax liabilities			$	(41,015)					$	(39,183)

The state income tax net operating losses expire between 2025 and 2044. The valuation allowance associated with the state income tax net operating losses was released in 2023. The tax years 2020 through 2023 remain open related to the state returns, and 2021 through 2023 for the federal returns.

17. SEGMENT INFORMATION

The Company’s segment disclosures present the measure used by the chief operating decision makers (“CODMs”) for purposes of assessing each segment’s performance. The Company’s CODMs are comprised of several members of its executive management team who use net operating income (“NOI”) to assess the performance of the business for the Company’s reportable operating segments. The Company’s segments are comprised of two reportable segments: (1) self-storage operations and (2) tenant reinsurance. NOI for the Company's self-storage operations represents total property revenue less direct property operating expenses. NOI for the Company's tenant reinsurance segment represents tenant reinsurance revenue less tenant reinsurance expenses.

The Company's consolidated revenues equal total segment revenues plus management fees and other income. The self-storage operations activities include rental operations of wholly-owned stores and self-storage units acquired in the Bargold transaction on June 1, 2022. Tenant reinsurance activities include the reinsurance of risks relating to the loss of goods stored by tenants in the stores operated by the Company. Excluded from segment revenues and net operating income is management fees and other income.

The Chief Executive Officer (“CEO”) is the primary CODM for self-storage operations, and the Chief Financial Officer (“CFO”) is the primary CODM for tenant reinsurance. The CODM for each reportable operating segment regularly reviews NOI to assess the performance of each segment and make decisions about resources to be allocated to each segment. As part of this process, the CODM approves each operating segment’s budget, determines allocation of funds for capital expenditures, and reviews monthly discrete financial information. Based on each segment’s budgeted operating revenues and expenses, resources are allocated to each segment, and these budgeted amounts comprising NOI are compared against actual segment performance.

For all periods presented, substantially all of the Company's real estate assets, intangible assets, other assets, and accrued and other liabilities are associated with the self-storage operations segment. Financial information for the Company’s business segments is set forth below:

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

			Year Ended December 31,
			2024						2023						2022
Revenues
Self-Storage Operations			$	2,803,252					$	2,222,578					$	1,654,735
Tenant Reinsurance			332,795						235,680						185,531
Total segment revenues			$	3,136,047					$	2,458,258					$	1,840,266
Operating expenses
Self-Storage Operations:
Payroll and benefits			$	170,529					$	127,300					$	94,005
Marketing			64,146						44,117						26,349
Office expense			123,604						97,621						74,400
Property operating expense			74,498						57,376						38,982
Repairs and maintenance			55,097						38,750						27,834
Property taxes			292,413						212,360						153,558
Insurance			32,892						25,466						14,636
Other segment items (1)			18,387						9,046						5,578
Total self-storage operations expenses			831,566						612,036						435,342
Tenant Reinsurance:
Tenant reinsurance expense and other segment items (2)			$	73,886					$	58,874					$	33,560
Total segment operating expenses			$	905,452					$	670,910					$	468,902
Net operating income
Self-Storage Operations			$	1,971,686					$	1,610,542					$	1,219,393
Tenant Reinsurance			258,909						176,806						151,971
Total segment net operating income:			$	2,230,595					$	1,787,348					$	1,371,364
Other components of net income:
Management fees and other income			120,855						101,986						83,904
Transaction costs			—						—						(1,548)
Life Storage Merger transition costs			—						(66,732)						—
General and administrative expense			(167,398)						(146,408)						(129,251)
Depreciation and amortization expense			(783,023)						(506,053)						(288,316)
Gain (loss) on real estate assets held for sale and sold, net			(25,906)						—						14,249
Impairment of Life Storage trade name			(51,763)						—						—
Interest expense			(551,354)						(419,035)						(219,171)
Non-cash interest expense related to amortization of discount on Life Storage unsecured senior notes			(43,720)						(18,786)						—
Interest income			124,422						84,857						69,422
Equity in earnings and dividend income from unconsolidated real estate entities			67,272						54,835						41,428
Equity in earnings of unconsolidated real estate ventures - gain on sale of real estate assets			13,730						—						—

EXTRA SPACE STORAGE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Income tax expense			(33,478)						(21,559)						(20,925)
Net income			$	900,232					$	850,453					$	921,156
(1) Other segment items for the Self-Storage Operations segment include miscellaneous items such as legal and professional fees, capital expenditures, taxes, and casualty losses.
(2) Tenant reinsurance expense and other segment items for the Tenant Reinsurance segment includes claims expense, acquisition costs, claims service fees and miscellaneous administrative items.

18. COMMITMENTS AND CONTINGENCIES

As of December 31, 2024, the Company was under agreement to acquire eight stores at a total purchase price of $81,533. Acquisitions of all eight stores are scheduled to close in 2025.

As of December 31, 2024, the Company was under contract to sell 13 stores at a total sales price of $144,550. The sales of all 13 stores are scheduled to close in 2025.

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

As of December 31, 2024, the Company was involved in various legal proceedings and was subject to various claims and complaints arising in the ordinary course of business. Because litigation is inherently unpredictable, the outcome of these matters cannot presently be determined with any degree of certainty. In accordance with applicable accounting guidance, management establishes an accrued liability for litigation when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. The estimated loss, if any, is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known and unknown uncertainties. The Company could incur judgments or enter into settlements of claims in the future that could have a material adverse effect on its results of operations in any particular period, notwithstanding the fact that the Company is currently vigorously defending any legal proceedings against it. In the opinion of management, such litigation, claims and complaints are not expected to have a material adverse effect on the Company’s financial condition or results of operations.

Although there can be no assurance, the Company is not aware of any material environmental liability, for which it believes it will be ultimately responsible, that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to its properties could result in future material environmental liabilities.

Extra Space Storage Inc.

Schedule III

Real Estate and Accumulated Depreciation

(Dollars in thousands)

As of December 31, 2024

												Building and Improvements Initial Cost			Adjustments and Costs to Land and Building Subsequent to Acquisition			Gross carrying amount at December 31, 2024
Self - Storage Facilities by State:			Store Count						Land Initial Cost						Building and Improvements						Accumulated Depreciation
Debt			Land			Total
AL			38			$	5,686		$	53,193		$	384,033		$	18,063		$	53,191		$	402,098		$	455,289		$	28,626
AZ			49			22,102			147,273			567,989			18,431			147,272			586,421			733,693			59,998
CA			219			202,634			914,399			2,286,177			287,455			914,618			2,573,413			3,488,031			501,397
CO			27			25,798			49,985			192,497			22,640			50,703			214,419			265,122			39,143
CT			23			6,179			43,453			373,628			8,264			43,452			381,892			425,344			28,491
FL			256			151,928			692,608			3,009,106			131,435			690,728			3,142,421			3,833,149			323,023
GA			120			78,738			304,982			1,195,949			55,865			304,970			1,251,826			1,556,796			157,456
HI			14			—			29,836			160,978			25,305			29,836			186,282			216,118			48,926
ID			2			—			4,047			25,235			71			4,047			25,306			29,353			1,468
IL			104			15,888			203,952			1,082,223			54,630			203,331			1,137,474			1,340,805			112,677
IN			92			—			64,877			508,534			17,683			64,528			526,566			591,094			47,931
KS			1			—			366			1,897			1,200			366			3,097			3,463			1,668
KY			15			30,070			10,026			88,389			22,085			10,799			109,701			120,500			24,599
LA			10			—			16,673			126,604			6,660			16,674			133,263			149,937			12,356
MA			65			38,786			120,291			546,958			69,802			120,472			616,579			737,051			140,277
MD			44			71,078			157,195			450,952			46,923			156,605			498,465			655,070			124,999
ME			5			—			2,352			86,339			792			2,352			87,131			89,483			3,195
MI			11			4,199			13,162			89,881			7,467			13,162			97,348			110,510			15,525
MN			7			—			9,696			74,960			7,143			9,696			82,103			91,799			12,120
MO			29			—			33,809			357,853			15,112			33,768			373,006			406,774			24,006
MS			7			—			9,053			82,098			2,646			9,052			84,745			93,797			7,868
NC			54			—			93,492			557,728			17,743			93,489			575,473			668,962			47,845
NH			17			—			50,952			195,719			3,393			51,015			199,049			250,064			10,291
NJ			90			78,795			310,950			1,081,676			84,560			317,420			1,159,766			1,477,186			242,193
NM			12			24,572			32,248			72,559			8,450			32,247			81,010			113,257			19,464
NV			33			15,783			98,798			477,649			14,252			98,973			491,726			590,699			35,384
NY			80			3,235			341,104			1,200,614			83,904			342,924			1,282,698			1,625,622			140,005
OH			50			9,920			71,460			388,236			27,786			71,459			416,023			487,482			36,109
OK			4			—			3,917			28,534			458			3,917			28,992			32,909			1,191
OR			8			23,319			15,066			68,044			3,159			15,066			71,203			86,269			16,087
PA			31			10,386			57,671			356,325			39,082			56,997			396,080			453,077			57,399
RI			6			3,585			6,132			55,033			2,124			6,131			57,158			63,289			6,045
SC			46			27,568			65,032			385,333			16,162			65,036			401,491			466,527			52,193
TN			31			30,338			55,637			259,210			17,107			55,637			276,317			331,954			44,087
TX			274			61,631			587,514			2,788,363			117,215			587,843			2,905,249			3,493,092			285,874
UT			10			15,895			9,008			39,295			10,751			9,008			50,046			59,054			16,988
VA			73			43,618			198,998			842,848			46,577			198,998			889,425			1,088,423			152,288
WA			16			4,729			68,560			188,949			15,257			68,562			204,204			272,766			24,049
WI			2			—			2,192			31,270			463			2,192			31,733			33,925			706
DC			1			7,201			14,394			18,172			739			14,394			18,911			33,305			4,429
Other corporate assets						—			—			11,037			270,344			—			281,381			281,381			96,203
Intangible tenant relationships and lease rights						—			—			354,183			—			—			354,183			354,183			317,639
Construction in Progress/Undeveloped Land						—			25,002			4,383			100,446			23,712			106,188			129,900			1,191
Right of use asset - finance lease						—			—			—			140,259			—			140,259			140,259			15,727
Totals (1)			1,976			$	1,013,661		$	4,989,355		$	21,097,440		$	1,839,903		$	4,994,642		$	22,932,121		$	27,926,763		$	3,339,136

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

Extra Space Storage Inc. Schedule III (continued)

Activity in real estate facilities during the years ended December 31, 2024, 2023 and 2022 is as follows:

			2024						2023						2022
Operating facilities
Balance at beginning of year			$	27,061,533					$	12,084,025					$	10,643,722
Acquisitions			590,044						14,715,285						1,390,463
Improvements			200,333						175,932						95,282
Transfers from construction in progress			148,702						87,485						70,565
Dispositions and other			(175,142)						(1,194)						(116,007)
Balance at end of year			$	27,825,470					$	27,061,533					$	12,084,025
Accumulated depreciation:
Balance at beginning of year			$	2,624,405					$	2,138,395					$	1,868,321
Depreciation expense			714,731						486,010						276,155
Dispositions and other			—						—						(6,081)
Balance at end of year			$	3,339,136					$	2,624,405					$	2,138,395
Real estate under development/redevelopment:
Balance at beginning of year			$	118,745					$	52,348					$	59,248
Current development			131,249						153,920						63,597
Transfers to operating facilities			(148,701)						(87,523)						(70,565)
Dispositions and other			—						—						68
Balance at end of year			$	101,293					$	118,745					$	52,348
Net non-lease real estate assets (1)			$	24,587,627					$	24,555,873					$	9,997,978

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

As of December 31, 2024, the aggregate cost of real estate for U.S. federal income tax purposes was $19,115,556.