The mandatory redemption feature, including any unpaid dividends, makes Extended Stay America’s (STAY) preferred stock similar to debt (a bond). Even though the security is called “preferred stock,” it represents an obligation that meets the definition of a liability. Thus, Extended Stay America reports this preferred stock as a liability on its balance sheet as follows (in thousands):

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Liabilities: Accounts payable and accrued liabilities Term loan payable Senior notes payable Mandatorily redeemable preferred stock Other Total liabilities $ 211,181 618,338 2,014,298 7,130 3,379 $2,854,326