Extra Space Storage Inc. Reports Third Quarter 2009 Results

SALT LAKE CITY, UT, Nov 02 (MARKET WIRE) --
Extra Space Storage Inc. (NYSE: EXR), a leading owner and operator of
self-storage properties in the United States, announced today operating
results for the three and nine months ended September 30, 2009.

Highlights for the Three Months Ended September 30, 2009:

-- Achieved funds from operations ("FFO") of $0.23 per diluted share
including development dilution of $0.02 per share.

-- Same-store revenue and net operating income ("NOI") at the Company's
252 same-store properties decreased by 4.5% and 6.2%, respectively, when
compared to the three months ended September 30, 2008.

-- Closed $114.1 million of debt financing during the quarter and an
additional $3.3 million subsequent to quarter end.

-- Completed the development of eight self-storage properties at a total
cost of approximately $91.0 million.

Spencer F. Kirk, Chairman and CEO of Extra Space Storage Inc., stated:
"During the third quarter our property operations showed signs of
stabilization with an increase in rental activity and a reduction in
vacates. As a result of demand stabilization and our dynamic pricing
strategies, our incoming rental rates have improved from earlier in the
year. We again made strides in solidifying our balance sheet by closing
$114 million in new stabilized property and development loans."

FFO Per Share:

The Company's FFO for the three months ended September 30, 2009 was $0.23
per diluted share including development dilution of $0.02 per share. This
compares to FFO per diluted share for the three months ended September 30,
2008 of $0.27 per diluted share including development dilution of $0.01
per share. After adjusting to exclude $0.02 per share of non-cash interest
charges related to the Company's exchangeable senior notes, FFO was $0.29
per diluted share for the three months ended September 30, 2008.

FFO for the nine months ended September 30, 2009 was $0.76 per diluted
share including development dilution of $0.06 per share. FFO was $0.71 per
diluted share after adjusting to exclude a $0.30 per share gain on
repurchase of exchangeable senior notes, a $0.23 per share charge
attributable to the wind down of the Company's development program and
$0.02 per share of non-cash interest charges related to the Company's
exchangeable senior notes. This compares to FFO for the nine months ended
September 30, 2008 of $0.75 per diluted share including development
dilution of $0.03 per share. After adjusting to exclude a $0.02 per share
charge from unrecovered acquisition costs and $0.04 per share of non-cash
interest charges related to the Company's exchangeable senior notes, FFO
was $0.81 per diluted share for the nine months ended September 30, 2008.

FFO is a supplemental non-GAAP financial measure used in the real estate
industry to measure and compare the operating performance of real estate
companies. A complete reconciliation containing adjustments from GAAP net
income attributable to common stockholders to FFO and a definition of FFO
are included at the end of this release. On January 1, 2009, the Company
adopted Accounting Standards Codification ("ASC") 470-20 (formerly FASB
Staff Position No. APB 14-1), which requires companies to expense certain
implied costs of the option value related to convertible debt.
Retrospective adoption of this accounting standard has resulted in the
restatement of certain prior period numbers.

Operating Results:

Total revenues for the three months ended September 30, 2009 were $71.3
million compared to $69.8 million for the three months ended September 30,
2008. Total expenses for the three months ended September 30, 2009 were
$48.1 million compared to $45.5 million for the three months ended
September 30, 2008. Interest expense, including non-cash interest charges
relating to the Company's exchangeable senior notes, was $18.1 million
compared to $17.0 million for the three months ended September 30, 2008.
Net income for the three months ended September 30, 2009 was $7.6 million
compared to $11.9 million for the three months ended September 30, 2008.

Total revenues for the nine months ended September 30, 2009 were $209.6
million compared to $202.9 million for the nine months ended September 30,
2008. Total expenses for the nine months ended September 30, 2009 were
$162.1 million compared to $134.5 million for the nine months ended
September 30, 2008. Interest expense, including non-cash interest charges
relating to the Company's exchangeable senior notes, was $51.1 million
compared to $51.4 million for the nine months ended September 30, 2008.
Net income for the nine months ended September 30, 2009 was $31.7 million
compared to $26.3 million for the nine months ended September 30, 2008.

Same-Store Property Performance:

For the three months ended September 30, 2009, the Company's same-store
revenue and NOI decreased by 4.5% and 6.2%, respectively, when compared to
the three months ended September 30, 2008. The decrease in same-store
rental revenue compared to three months ended September 30, 2008 was due
to lower occupancy and decreased rental rates to incoming customers. The
Company's same-store expenses decreased by 1.2% when compared to the three
months ended September 30, 2008 primarily due to lower payroll and utility
costs.

Balance Sheet:

During the third quarter, the Company obtained $114.1 million of financing
consisting of four loans secured by 20 operating properties totaling $93.7
million and three construction loans totaling $20.4 million. Subsequent to
the end of the quarter, the Company completed an additional $3.3 million
of debt financing. The Company has closed $280.8 million in financing to
date in 2009.

As of September 30, 2009, the Company's total debt, including notes
payable, notes payable to trusts, exchangeable senior notes and lines of
credit, was $1.4 billion, compared to $1.3 billion at December 31, 2008.
Total cash as of September 30, 2009 was $101.0 million. The Company's
percentage of total fixed rate debt to total debt was 80.4%. The weighted
average interest rate was 5.5% for fixed rate debt and 3.0% for variable
rate debt with a combined weighted average interest rate of 5.0% as of
September 30, 2009.

Subsequent to the end of the quarter, the Company repurchased $7.5 million
principal amount of exchangeable senior notes which will result in a gain
on early extinguishment of debt of approximately $0.4 million in the
fourth quarter.

Development Projects Completed:

The Company completed the development of eight projects at a total cost of
$91.0 million. The properties are located in California, Florida and
Oregon. There are 14 development projects remaining to be completed over
the balance of 2009 and 2010.

Harrison Street Joint Venture:

As previously announced, the Company amended its joint venture agreement
with an affiliate of Harrison Street Real Estate Capital, LLC ("HSRE").
Under the amended terms, HSRE will contribute approximately $15.0 million
in cash to the joint venture in return for a 50.0% ownership interest. The
Company will contribute 19 wholly-owned properties and will receive
approximately $15.0 million in cash and a 50.0% ownership interest in the
joint venture. The joint venture will assume approximately $101.0 million
of debt which is secured by the properties. The properties are located in
California, Florida, Nevada, Ohio, Pennsylvania, Tennessee, Texas and
Virginia. The Company will continue to operate the properties. The
transaction is subject to customary closing conditions and debt assumption
and is currently anticipated to close by the end of the fourth quarter of
2009.

Outlook:

The Company currently estimates that fully diluted FFO per share-adjusted
for the year ending December 31, 2009 will be between $0.89 and $0.92
including lease-up dilution of $0.08 per share. FFO estimates for the year
are fully diluted for an estimated average number of shares and Operating
Partnership units ("OP units") outstanding during the year. The Company's
estimates are forward-looking and based on management's view of current
and future market conditions.

The Company's actual results may differ materially from these estimates,
which include the following annual assumptions:

-- Excludes gains on extinguishment of exchangeable senior notes of
approximately $27.9 million, non-cash interest charges associated with
exchangeable senior notes of between $2.4 million and $2.6 million and
charges of $20.3 million attributable to the wind down of the Company's
development program.

-- Same-store property revenue decrease, including tenant reinsurance
income, between (4.0%) and (3.0%).

-- Same-store property expense growth between (0.5%) and 0.5%.

-- Same-store property NOI decrease, including net tenant reinsurance
income, between (6.0%) and (4.0%).

-- Net tenant reinsurance income between $15.0 million and $16.0 million.

-- General and administrative expenses, net of development fees, between
$41.0 million and $42.0 million, including non-cash compensation expense of
approximately $3.5 million.

-- Average monthly cash balance of approximately $150.0 million.

-- Equity in earnings of real estate ventures between $6.0 million and
$8.0 million.

-- Interest expense between $68.0 million and $71.0 million.

-- Weighted average LIBOR of 0.4%.

-- Weighted average number of outstanding shares, including Operating
Partnership units, of approximately 91.3 million.

-- Dilution associated with the Company's development program of between
$6.5 million and $7.5 million.

-- Taxes associated with the Company's taxable Real Estate Investment
Trust "REIT" subsidiary of between $2.8 million and $3.0 million.

Supplemental Financial Information:

Supplemental unaudited financial information regarding the Company's
performance can be found on the Company's website at www.extraspace.com.
Click on the "Investor Relations" link at the bottom of the home page,
then on "Financial Reports," then on "Quarterly and Other Reports" in the
middle of the page and the document entitled "Q3 2009 Supplemental
Financial Information." This supplemental information provides additional
detail on items that include property occupancy and financial performance
by portfolio and market, debt maturity schedules and performance and
progress of property development.

Conference Call:

The Company will also host a conference call at 1:00 p.m. Eastern Time on
Tuesday, November 3, 2009 to discuss its financial results. A live webcast
of the conference call will be available online on the Company's website
at www.extraspace.com in the Investor Relations section. The conference
call can also be accessed by dialing 877-407-0789 or 201-689-8562 for
international participants. A replay of the call will be available from
4:00 p.m. Eastern Time on November 3, 2009, until midnight Eastern Time on
November 17, 2009. The replay dial-in numbers are 877-660-6853 or
201-612-7415 for international callers. To access the telephonic replay,
please enter account number 3055 along with the conference ID 335083.

Forward-Looking Statements:

Certain information set forth in this release contains "forward-looking
statements" within the meaning of the federal securities laws.
Forward-looking statements include statements concerning our plans,
objectives, goals, strategies, future events, future revenues or
performance, capital expenditures, financing needs, plans or intentions
relating to acquisitions and other information that is not historical
information. In some cases, forward-looking statements can be identified
by terminology such as "believes," "estimates," "expects," "may," "will,"
"should," "anticipates," or "intends," or the negative of such terms or
other comparable terminology, or by discussions of strategy. We may also
make additional forward-looking statements from time to time. All such
subsequent forward-looking statements, whether written or oral, by us or
on our behalf, are also expressly qualified by these cautionary
statements. There are a number of risks and uncertainties that could
cause our actual results to differ materially from the forward-looking
statements contained in or contemplated by this release. Any forward
looking statements should be considered in light of the risks referenced
in the "Risk Factors" section included in our most recent Annual Report
on Form 10-K and Quarterly Reports on Form 10-Q. Such factors include,
but are not limited to:

-- changes in general economic conditions and in the markets in which we
operate;

-- the effect of competition from new self-storage facilities or other
storage alternatives, which could cause rents and occupancy rates to
decline;

-- potential liability for uninsured losses and environmental
contamination;

-- difficulties in our ability to evaluate, finance and integrate
acquired and developed properties into our existing operations and to lease
up those properties, which could adversely affect our profitability;

-- the impact of the regulatory environment as well as national, state,
and local laws and regulations including, without limitation, those
governing REITs, which could increase our expenses and reduce our cash
available for distribution;

-- recent disruptions in credit and financial markets and resulting
difficulties in raising capital at reasonable rates, which could impede our
ability to grow;

-- the possibility that the joint venture transaction with HSRE may not
close on the terms described in this release, or at all, or that the
expected benefits from the transaction may not be realized;

-- delays in the development and construction process, which could
adversely affect our profitability;

-- economic uncertainty due to the impact of war or terrorism, which
could adversely affect our business plan; and

-- our ability to attract and retain qualified personnel and management
members.

All forward-looking statements are based upon our current
expectations and various assumptions. Our expectations, beliefs and
projections are expressed in good faith and we believe there is a
reasonable basis for them, but there can be no assurance that
management's expectations, beliefs and projections will result or be
achieved. All forward-looking statements apply only as of the date made.
We undertake no obligation to publicly update or revise forward-looking
statements which may be made to reflect events or circumstances after the
date made or to reflect the occurrence of unanticipated events.

Notes to Financial Information:

The Company operates as a self-managed and self-administered REIT. Readers
are encouraged to find further detail regarding Extra Space Storage's
organizational structure in its Annual Report on Form 10-K for the year
ended December 31, 2008 as filed with the SEC.

Definition of FFO:

FFO provides relevant and meaningful information about the Company's
operating performance that is necessary, along with net income and cash
flows, for an understanding of the Company's operating results. The
Company believes FFO is a meaningful disclosure as a supplement to net
earnings. Net earnings assume that the values of real estate assets
diminish predictably over time as reflected through depreciation and
amortization expenses. The values of real estate assets fluctuate due to
market conditions and the Company believes FFO more accurately reflects
the value of the Company's real estate assets. FFO is defined by the
National Association of Real Estate Investment Trusts, Inc. ("NAREIT") as
net income computed in accordance with accounting principles generally
accepted in the United States ("GAAP"), excluding gains or losses on
sales of operating properties, plus depreciation and amortization and
after adjustments to record unconsolidated partnerships and joint
ventures on the same basis. The Company believes that to further
understand the Company's performance, FFO should be considered along with
the reported net income and cash flows in accordance with GAAP, as
presented in the Company's consolidated financial statements.

For informational purposes, the Company provides FFO adjusted for the
exclusion of gains from early extinguishment of debt, non-recurring
write-downs and non-cash interest charges related to ASC 470-20 (formerly
FASB Staff Position No. APB 14-1). Although the Company's calculation of
FFO as adjusted differs from NAREIT's definition of FFO and may not be
comparable to that of other REITs and real estate companies, the Company
believes it provides a meaningful supplemental measure of operating
performance. The Company believes that by excluding gains from early
extinguishment of debt, non-recurring write-downs and non-cash charges
related to ASC 470-20 (formerly FASB Staff Position No. APB 14-1),
stockholders and potential investors are presented with an indicator of
its operating performance that more closely achieves the objectives of
the real estate industry in presenting FFO. FFO as adjusted by the
Company should not be considered a replacement of the NAREIT definition
of FFO or used as an alternative to net income as an indication of the
Company's performance, as an alternative to net cash flow from operating
activities, as a measure of liquidity, or as an indicator of the
Company's ability to make cash distributions.

The Company's computation of FFO may not be comparable to FFO reported by
other REITs or real estate companies that do not define the term in
accordance with the current NAREIT definition or that interpret the
current NAREIT definition differently. FFO does not represent cash
generated from operating activities determined in accordance with GAAP,
and should not be considered as an alternative to net income as an
indication of the Company's performance, as an alternative to net cash
flow from operating activities, as a measure of liquidity, or as an
indicator of the Company's ability to make cash distributions.

Definition of Same-Store:

The Company's same-store stabilized properties for the three and nine
months ended September 30, 2009 and 2008 consisted of 252 properties that
were wholly-owned and operated and that were stabilized by the first day
of each period. The Company considers a property to be stabilized once it
has been open three years or has sustained average square foot occupancy
of 80.0% or more for one calendar year. Same-store results provide
information relating to property operations without the effects of
acquisitions or completed developments and should not be used as a basis
for future same-store performance or for the performance of the Company's
properties as a whole.

About Extra Space Storage Inc.:

At September 30, 2009, the Company operated or had ownership interests in
749 operating properties, 286 of which were wholly-owned and consolidated,
seven of which were held in joint ventures and consolidated, 342 of which
were held in joint ventures and accounted for using the equity method, and
114 of which were managed and in which the Company held no ownership
interest. This compares to September 30, 2008, at which time the Company
operated or had ownership interests in 684 operating properties, 269 of
which were wholly-owned and consolidated, three of which were held in
joint ventures and consolidated, 345 of which were held in joint ventures
and accounted for using the equity method, and 67 of which were managed
and in which the Company held no ownership interest. Results for both
periods include equity in earnings of real estate joint ventures,
management fees, tenant reinsurance and other income.

Extra Space Storage Inc. is a leading owner and operator of self-storage
properties headquartered in Salt Lake City, Utah. The Company owns and/or
operates 749 self-storage properties in 33 states and Washington, D.C. The
Company's properties comprise approximately 500,000 units and 54 million
square feet of rentable space.

FFO and FFO -- Adjusted for the Three and Nine Months Ended September
30, 2009 and 2008 -- Unaudited
(In thousands, except share data)

Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Net income attributable to
common stockholders $ 5,967 $ 9,916 $ 26,045 $ 20,748

Adjustments:
Real estate depreciation 12,959 10,791 35,943 30,526
Amortization of
intangibles 198 1,066 1,446 3,503
Joint venture real estate
depreciation and
amortization 1,475 1,534 4,284 3,644
Joint venture (gain) loss
on sale of properties (20) - 168 -
Distributions paid on
Preferred Operating
Partnership units (1,438) (1,438) (4,313) (4,313)
Income allocated to
Operating Partnership
noncontrolling interests 1,777 2,118 6,250 5,926
---------- ---------- ---------- ----------

Funds from operations $ 20,918 $ 23,987 $ 69,823 $ 60,034
========== ========== ========== ==========

Adjustments:
Non-cash interest expense
related to amortization
of discount on
exchangeable senior notes 430 1,059 1,834 3,147
Gain on repurchase of
exchangeable senior notes - - (27,576) -
Unrecovered development
and acquisition costs 22 39 18,905 1,631
Severance costs associated
with wind-down of
development program - - 1,400 -
---------- ---------- ---------- ----------

Funds from operations -
adjusted $ 21,370 $ 25,085 $ 64,386 $ 64,812
========== ========== ========== ==========

Diluted funds from
operations per share $ 0.23 $ 0.27 $ 0.76 $ 0.75
========== ========== ========== ==========
Diluted funds from
operations per share -
adjusted $ 0.23 $ 0.29 $ 0.71 $ 0.81
========== ========== ========== ==========

Weighted average number of
shares - diluted 91,548,984 87,710,663 91,321,503 79,673,881

Reconciliation of the Company's Calculation of FFO Per Diluted Share and
FFO Per Diluted Share -- Adjusted to GAAP Net Income Per Diluted Share
for the Three and Nine Months Ended September 30, 2009 and 2008 --
Unaudited

Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Net income attributable to
common stockholders per
diluted share $ 0.07 $ 0.11 $ 0.29 $ 0.26

Adjustments:
Real estate depreciation 0.14 0.13 0.39 0.38
Amortization of intangibles - 0.01 0.01 0.04
Joint venture real estate
depreciation and amortization 0.02 0.02 0.05 0.05
Distributions paid on
Preferred Operating
Partnership units (0.02) (0.02) (0.05) (0.05)
Income allocated to Operating
Partnership noncontrolling
interests 0.02 0.02 0.07 0.07
--------- --------- --------- ---------
Diluted funds from operations
per share $ 0.23 $ 0.27 $ 0.76 $ 0.75
========= ========= ========= =========

Adjustments:
Non-cash interest expense
related to amortization of
discount on exchangeable
senior notes $ - $ 0.01 $ 0.02 $ 0.04
Gain on repurchase of
exchangeable senior notes - - (0.30) -
Unrecovered development and
acquisition costs - 0.01 0.21 0.02
Severance costs associated
with wind-down of development
program - - 0.02 -
--------- --------- --------- ---------
Diluted funds from operations
per share - adjusted $ 0.23 $ 0.29 $ 0.71 $ 0.81
========= ========= ========= =========

Same-Store Property Performance for the Three and Nine Months Ended
September 30, 2009 and 2008 -- Unaudited
(In thousands, except occupancy and property counts.)

Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- Percent -------------------- Percent
2009 2008 Change 2009 2008 Change
--------- --------- ------ --------- --------- -------
Same-store
rental and
tenant
reinsurance
revenues $ 57,013 $ 59,703 (4.5%) $ 170,402 $ 174,819 (2.5%)
Same-store
operating
and tenant
reinsurance
expenses 20,253 20,495 (1.2%) 60,256 60,751 (0.8%)
Same-store
net
operating
income 36,760 39,208 (6.2%) 110,146 114,068 (3.4%)

Non
same-store
rental and
tenant
reinsurance
revenues 8,909 4,559 95.4% 23,338 11,810 97.6%
Non
same-store
operating
and tenant
reinsurance
expenses 4,033 2,298 75.5% 11,196 6,078 84.2%

Total rental
and tenant
reinsurance
revenues 65,922 64,262 2.6% 193,740 186,629 3.8%
Total
operating
and tenant
reinsurance
expenses 24,286 22,793 6.6% 71,452 66,829 6.9%

Same-store
square foot
occupancy
as of
quarter end 84.2% 85.6% 84.2% 85.6%

Properties
included in
same-store 252 252 252 252

Reconciliation of the Range of Estimated Fully Diluted Net Income Per
Share to Estimated Fully Diluted FFO and Fully Diluted FFO Per Share
-- Adjusted for the Three Months and Year Ending December 31, 2009 --
Unaudited

Three Months Ended Year Ended
December 31, 2009 December 31, 2009
------------------ ------------------
Low End High End Low End High End
-------- -------- -------- --------
Net income $ 0.03 $ 0.06 $ 0.32 $ 0.35
Income allocated to
Operating Partnership
minority interest 0.01 0.01 0.07 0.07
-------- -------- -------- --------
Net income attributable to
common stockholders per
diluted share 0.04 0.07 0.39 0.42

Adjustments:
Real estate depreciation 0.14 0.14 0.53 0.53
Amortization of intangibles - - 0.02 0.02
Joint venture real estate
depreciation and amortization 0.02 0.02 0.06 0.06
Distributions paid on
Preferred Operating
Partnership units (0.02) (0.02) (0.06) (0.06)
-------- -------- -------- --------
Diluted funds from operations
per share $ 0.18 $ 0.21 $ 0.94 $ 0.97
======== ======== ======== ========

Adjustments:
Non-cash interest expense
related to amortization of
discount on exchangeable
senior notes $ 0.01 $ 0.01 $ 0.03 $ 0.03
Gain on repurchase of
exchangeable senior notes - - (0.30) (0.30)
Severance costs associated
with wind-down of development
program - - 0.22 0.22
-------- -------- -------- --------
Diluted funds from operations
per share - adjusted $ 0.19 $ 0.22 $ 0.89 $ 0.92
======== ======== ======== ========

Consolidated Balance Sheets
(In thousands, except share data)

September 30, 2009 December 31, 2008
------------------ -----------------
(unaudited) (as revised)
Assets:
Real estate assets:
Net operating real estate assets $ 1,989,675 $ 1,938,922
Real estate under development 52,942 58,734
------------------ -----------------
Net real estate assets 2,042,617 1,997,656

Investments in real estate ventures 132,356 136,791
Cash and cash equivalents 100,992 63,972
Restricted cash 42,083 38,678
Receivables from related parties and
affiliated real estate joint
ventures 3,377 11,335
Other assets, net 47,725 42,576
------------------ -----------------
Total assets $ 2,369,150 $ 2,291,008
================== =================

Liabilities, Noncontrolling
Interests and Equity:
Notes payable $ 1,044,446 $ 943,598
Notes payable to trusts 119,590 119,590
Exchangeable senior notes 95,163 209,663
Discount on exchangeable senior
notes (4,639) (13,031)
Lines of credit 100,000 27,000
Accounts payable and accrued
expenses 40,636 35,128
Other liabilities 25,219 22,267
------------------ -----------------
Total liabilities 1,420,415 1,344,215
------------------ -----------------

Commitments and contingencies

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,
300,000,000 shares authorized,
86,435,938 and 85,790,331 shares
issued and outstanding at
September 30, 2009 and December
31, 2008, respectively 864 858
Paid-in capital 1,132,865 1,130,964
Accumulated other comprehensive
deficit (1,584) -
Accumulated deficit (248,533) (253,052)
------------------ -----------------
Total Extra Space Storage Inc.
stockholders' equity 883,612 878,770
Noncontrolling interest represented
by Preferred Operating Partnership
units, net of $100,000 note
receivable 29,941 29,837
Noncontrolling interest in
Operating Partnership 34,153 36,628
Other noncontrolling interests 1,029 1,558
------------------ -----------------
Total noncontrolling interests
and equity 948,735 946,793
------------------ -----------------
Total liabilities,
noncontrolling
interests and equity $ 2,369,150 $ 2,291,008
================== =================

Consolidated Statement of Operations for the Three Months Ended September
30, 2009 and 2008 -- Unaudited
(In thousands, except share and per share data)

Three Months Ended September 30,
--------------------------------
2009 2008
--------------- ---------------
(as revised)
Revenues:
Property rental $ 60,380 $ 59,997
Management and franchise fees 5,191 5,417
Tenant reinsurance 5,542 4,265
Other income 191 169
--------------- ---------------
Total revenues 71,304 69,848
--------------- ---------------

Expenses:
Property operations 23,022 21,367
Tenant reinsurance 1,264 1,426
Unrecovered development and
acquisition costs 22 39
General and administrative 9,982 10,316
Depreciation and amortization 13,797 12,355
--------------- ---------------
Total expenses 48,087 45,503
--------------- ---------------

Income before interest, equity in
earnings of real estate ventures and
income tax expense 23,217 24,345

Interest expense (17,697) (15,904)
Non-cash interest expense related to
amortization of discount on
exchangeable senior notes (430) (1,059)
Interest income 245 1,280
Interest income on note receivable
from Preferred Operating Partnership
unit holder 1,213 1,213
Equity in earnings of real estate
ventures 1,752 2,015
Income tax expense (726) (3)
--------------- ---------------
Net income 7,574 11,887

Net income allocated to Preferred
Operating Partnership noncontrolling
interests (1,506) (1,570)

Net income allocated to Operating
Partnership and other noncontrolling
interests (101) (401)
--------------- ---------------
Net income attributable to common
stockholders $ 5,967 $ 9,916
=============== ===============

Net income per common share
Basic $ 0.07 $ 0.13
Diluted $ 0.07 $ 0.13

Weighted average number of shares
Basic 86,437,877 82,184,631
Diluted 91,548,984 87,710,663

Cash dividends paid per common share $ - $ 0.25

Consolidated Statement of Operations for the Nine Months Ended September
30, 2009 and 2008 -- Unaudited
(In thousands, except share and per share data)

Nine Months Ended September 30,
--------------------------------
2009 2008
--------------- ---------------
(as revised)
Revenues:
Property rental $ 178,494 $ 174,906
Management and franchise fees 15,685 15,837
Tenant reinsurance 15,246 11,723
Other income 201 425
--------------- ---------------
Total revenues 209,626 202,891
--------------- ---------------

Expenses:
Property operations 67,456 62,871
Tenant reinsurance 3,996 3,958
Unrecovered development and
acquisition costs 18,905 1,631
Severance costs associated with
wind-down of development program 1,400 -
General and administrative 31,195 30,378
Depreciation and amortization 39,160 35,633
--------------- ---------------
Total expenses 162,112 134,471
--------------- ---------------

Income before interest, equity in
earnings of real estate ventures,
gain on repurchase of exchangeable
senior notes, loss on sale of
investments available for sale and
income tax expense 47,514 68,420

Interest expense (49,308) (48,220)
Non-cash interest expense related
to amortization of discount on
exchangeable senior notes (1,834) (3,147)
Interest income 1,098 2,575
Interest income on note receivable
from Preferred Operating
Partnership unit holder 3,638 3,638
Equity in earnings of real estate
ventures 5,288 4,610
Gain on repurchase of exchangeable
senior notes 27,576 -
Loss on sale of investments
available for sale - (1,415)
Income tax expense (2,317) (190)
--------------- ---------------
Net income 31,655 26,271

Net income allocated to Preferred
Operating Partnership
noncontrolling interests (4,681) (4,627)

Net income allocated to Operating
Partnership and other
noncontrolling interests (929) (896)
--------------- ---------------
Net income attributable to common
stockholders $ 26,045 $ 20,748
=============== ===============

Net income per common share
Basic $ 0.30 $ 0.28
Diluted $ 0.30 $ 0.28

Weighted average number of shares
Basic 86,260,442 74,116,345
Diluted 91,321,503 79,673,881

Cash dividends paid per common
share $ 0.25 $ 0.75

For Information:

James Overturf
Extra Space Storage Inc.
(801) 365-4501

Copyright 2009, Market Wire, All rights reserved.

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