Public Storage Reports Results for the Fourth Quarter and Year Ended December 31, 2018

GLENDALE, Calif.–(BUSINESS WIRE)–Public Storage (NYSE:PSA) announced today operating results for the
quarter and year ended December 31, 2018.

Operating Results for the Three Months Ended
December 31, 2018

For the three months ended December 31, 2018, net income allocable to
our common shareholders was $530.1 million or $3.04 per diluted common
share, compared to $334.1 million or $1.92 per diluted common share in
2017 representing an increase of $196.0 million or $1.12 per diluted
common share. The increase is due primarily to (i) $183.1 million in
aggregate gains due to Shurgard Self Storage SA’s (“Shurgard Europe’s”)
initial public offering and the sale of our facility in West London to
Shurgard Europe, (ii) a $11.1 million increase in self-storage net
operating income (described below) and (iii) a $11.0 million increase
due to the impact of foreign currency exchange gains and losses
associated with our euro denominated debt, offset partially by (iv) a
$8.1 million increase in general and administrative expense due to the
acceleration of share-based compensation expense accruals for our former
CEO and CFO in 2018 as a result of their retirement on December 31, 2018.

The $11.1 million increase in self-storage net operating income is a
result of a $1.9 million increase in our Same Store Facilities (as
defined below) and a $9.2 million increase in our Non Same Store
Facilities (as defined below). Revenues for the Same Store Facilities
increased 1.2% or $6.7 million in the three months ended December 31,
2018 as compared to 2017, due primarily to higher realized annual rent
per occupied square foot. Cost of operations for the Same Store
Facilities increased by 4.1% or $4.8 million in the three months ended
December 31, 2018 as compared to 2017, due primarily to increased
property taxes and higher marketing expenses. The increase in net
operating income of $9.2 million for the Non Same Store Facilities is
due primarily to the impact of 164 self-storage facilities acquired and
developed since January 2016.

Operating Results for the Year Ended December
31, 2018

In 2018, net income allocable to our common shareholders was $1,488.9
million or $8.54 per diluted common share, compared to $1,171.6 million
or $6.73 per diluted common share in 2017 representing an increase of
$317.3 million or $1.81 per diluted common share. The increase is due
primarily to (i) $183.1 million in aggregate gains due to Shurgard
Europe’s initial public offering and the sale of our facility in West
London to Shurgard Europe, (ii) a $47.1 million increase in self-storage
net operating income (described below), (iii) our $37.7 million equity
share of gains recorded by PS Business Parks in 2018, (iv) a $68.2
million increase due to the impact of foreign currency exchange gains
and losses associated with our euro denominated debt, (v) a $29.3
million allocation to preferred shareholders associated with preferred
share redemptions in 2017 and (vi) a $7.8 million casualty loss and $5.2
million in incremental tenant reinsurance losses related to Hurricanes
Harvey and Irma in 2017. These impacts were offset partially by a $36.1
million increase in general and administrative expense due to the
acceleration of share-based compensation expense accruals for our former
CEO and CFO in 2018 as a result of their retirement on December 31, 2018
and the reversal of share-based compensation accruals forfeited by
retiring senior executive officers in 2017.

The $47.1 million increase in self-storage net operating income is a
result of a $15.6 million increase in our Same Store Facilities and
$31.5 million increase in our Non Same Store Facilities. Revenues for
the Same Store Facilities increased 1.5% or $33.3 million in 2018 as
compared to 2017, due primarily to higher realized annual rent per
occupied square foot. Cost of operations for the Same Store Facilities
increased by 3.2% or $17.7 million in 2018 as compared to 2017, due
primarily to increased property taxes. The increase in net operating
income of $31.5 million for the Non Same Store Facilities is due
primarily to the impact of 164 self-storage facilities acquired and
developed since January 2016.

Funds from Operations

For the three months ended December 31, 2018, funds from operations
(“FFO”) was $2.77 per diluted common share, as compared to $2.70 in
2017, representing an increase of 2.6%. FFO is a non-GAAP measure
defined by the National Association of Real Estate Investment Trusts and
generally represents net income before depreciation and amortization
expense, gains and losses and impairment charges with respect to real
estate assets. A reconciliation of GAAP diluted net income per share to
FFO per share, and additional descriptive information regarding this
non-GAAP measure, is attached.

For the year ended December 31, 2018, FFO was $10.45 per diluted common
share, as compared to $9.70 in 2017, representing an increase of 7.7%.

We also present “Core FFO per share,” a non-GAAP measure that represents
FFO per share excluding the impact of (i) foreign currency exchange
gains and losses, (ii) EITF D-42 charges related to the redemption of
preferred securities, (iii) accelerations of accruals due to the
retirement of our former CEO and CFO and reversals of accruals with
respect to share-based awards forfeited by retiring senior executive
officers and (iv) certain other non-cash and/or nonrecurring income or
expense items. We review Core FFO per share to evaluate our ongoing
operating performance, and we believe it is used by investors and REIT
analysts in a similar manner. However, Core FFO per share is not a
substitute for net income per share. Because other REITs may not compute
Core FFO per share in the same manner as we do, may not use the same
terminology or may not present such a measure, Core FFO per share may
not be comparable among REITs.

The following table reconciles from FFO per share to Core FFO per share
(unaudited):

 
     

Three Months Ended December 31,

 

Year Ended December 31,

2018

 

2017

 

Percentage
Change

2018

 

2017

 

Percentage
Change

 
FFO per share

$

2.77

$

2.70

2.6 %

$

10.45

$

9.70

7.7 %
Eliminate the per share impact of
items excluded from Core FFO, including
our equity share from investments:
Foreign currency exchange (gain) loss (0.03 ) 0.03 (0.10 ) 0.29
Application of EITF D-42 0.01 0.19
Casualty losses and tenant claims due to
hurricanes 0.07

Shurgard Europe – IPO costs and casualty

loss 0.02 0.03
Acceleration (reversal) of share-based
compensation expense due to
executive officer retirement 0.05 0.18 (0.03 )
Other items       0.01       0.01  
Core FFO per share

$

2.81

 

$

2.75

2.2 %

$

10.56

 

$

10.23

  3.2 %
 

Property Operations – Same Store Facilities

The Same Store Facilities represent those facilities that have been
owned and operated on a stabilized level of occupancy, revenues and cost
of operations since January 1, 2016. We review the operations of our
Same Store Facilities, which excludes facilities whose operating trends
are significantly affected by factors such as casualty events, as well
as recently developed or acquired facilities, to more effectively
evaluate the ongoing performance of our self-storage portfolio in 2016,
2017 and 2018. We believe the Same Store information is used by
investors and REIT analysts in a similar manner. The following table
summarizes the historical operating results of these 2,046 facilities
(131.2 million net rentable square feet) that represent approximately
81% of the aggregate net rentable square feet of our U.S. consolidated
self-storage portfolio at December 31, 2018.

 

Selected Operating Data for the Same

Store Facilities (2,046 facilities)

(unaudited):

      Three Months Ended December 31,   Year Ended December 31,
   

Percentage

    Percentage
2018 2017 Change 2018 2017 Change
 
(Dollar amounts in thousands, except for per square foot amounts)
Revenues:
Rental income $ 537,032 $ 530,276 1.3 % $ 2,144,330 $ 2,111,164 1.6 %
Late charges and administrative fees   24,868     24,888   (0.1 )%   98,425     98,263   0.2 %
Total revenues (a)   561,900     555,164   1.2 %   2,242,755     2,209,427   1.5 %
 
Cost of operations:
Property taxes 34,136 32,320 5.6 % 210,637 200,005 5.3 %
On-site property manager payroll 24,647 24,936 (1.2 )% 109,713 108,477 1.1 %
Supervisory payroll 7,473 8,547 (12.6 )% 35,275 38,175 (7.6 )%
Repairs and maintenance 11,150 11,203 (0.5 )% 42,730 43,465 (1.7 )%
Snow removal 683 766 (10.8 )% 3,470 2,982 16.4 %
Utilities 9,837 9,239 6.5 % 41,075 39,477 4.0 %
Marketing 8,744 6,794 28.7 % 30,771 28,679 7.3 %
Other direct property costs 14,746 14,305 3.1 % 59,096 56,975 3.7 %
Allocated overhead   11,678     10,151   15.0 %   46,753     43,539   7.4 %
Total cost of operations (a)   123,094     118,261   4.1 %   579,520     561,774   3.2 %
Net operating income (b) $ 438,806   $ 436,903   0.4 % $ 1,663,235   $ 1,647,653   0.9 %
 
Gross margin 78.1 % 78.7 % (0.8 )% 74.2 % 74.6 % (0.5 )%
 
Weighted average for the period:
Square foot occupancy 92.6 % 93.1 % (0.5 )% 93.2 % 93.8 % (0.6 )%
Realized annual rental income per (c):
Occupied square foot $ 17.68 $ 17.37 1.8 % $ 17.54 $ 17.15 2.3 %
Available square foot (“REVPAF”) $ 16.38 $ 16.17 1.3 % $ 16.35 $ 16.09 1.6 %
At December 31:
Square foot occupancy 91.4 % 91.2 % 0.2 %
Annual contract rent per occupied
square foot (d) $ 18.17 $ 17.94 1.3 %
 
  (a)   Revenues and cost of operations do not include ancillary revenues
and expenses generated at the facilities with respect to tenant
reinsurance and retail sales.
 
(b) See attached reconciliation of self-storage NOI to net income.
 
(c) Realized annual rent per occupied square foot is computed by
dividing annualized rental income, before late charges and
administrative fees, by the weighted average occupied square feet
for the period. Realized annual rent per available square foot
(“REVPAF”) is computed by dividing annualized rental income, before
late charges and administrative fees, by the total available
rentable square feet for the period. These measures exclude late
charges and administrative fees in order to provide a better measure
of our ongoing level of revenue. Late charges are dependent upon the
level of delinquency, and administrative fees are dependent upon the
level of move-ins. In addition, the rates charged for late charges
and administrative fees can vary independently from rental rates.
These measures take into consideration promotional discounts, which
reduce rental income.
 
(d) Contract rent represents the applicable contractual monthly rent
charged to our tenants, excluding the impact of promotional
discounts, late charges and administrative fees.
 

The following table summarizes selected quarterly financial data with
respect to the Same Store Facilities (unaudited):

 
      For the Quarter Ended  
March 31   June 30   September 30   December 31 Entire Year
(Amounts in thousands, except for per square foot amounts)
Total revenues:

2018

$ 548,116 $ 558,216 $ 574,523 $ 561,900 $ 2,242,755

2017

$ 536,618 $ 549,676 $ 567,969 $ 555,164 $ 2,209,427
 
Total cost of operations:

2018

$ 153,532 $ 150,688 $ 152,206 $ 123,094 $ 579,520

2017

$ 148,577 $ 146,857 $ 148,079 $ 118,261 $ 561,774
 
Property taxes:

2018

$ 58,359 $ 59,138 $ 59,004 $ 34,136 $ 210,637

2017

$ 55,831 $ 56,032 $ 55,822 $ 32,320 $ 200,005
 
Repairs and maintenance, including

snow removal expenses:

2018

$ 11,523 $ 11,593 $ 11,251 $ 11,833 $ 46,200

2017

$ 11,684 $ 11,387 $ 11,407 $ 11,969 $ 46,447
 
Marketing:

2018

$ 6,516 $ 7,697 $ 7,814 $ 8,744 $ 30,771

2017

$ 6,792 $ 8,127 $ 6,966 $ 6,794 $ 28,679
 
REVPAF:

2018

$ 15.97 $ 16.31 $ 16.75 $ 16.38 $ 16.35

2017

$ 15.63 $ 16.03 $ 16.54 $ 16.17 $ 16.09
 
Weighted average realized annual
rent per occupied square foot:

2018

$ 17.30 $ 17.35 $ 17.83 $ 17.68 $ 17.54

2017

$ 16.79 $ 16.95 $ 17.49 $ 17.37 $ 17.15
 
Weighted average occupancy levels
for the period:

2018

92.3 % 94.0 % 94.0 % 92.6 % 93.2 %

2017

93.1 % 94.6 % 94.6 % 93.1 % 93.8 %
 

The following table sets forth selected market trends in our Same Store
Facilities:

 
Same Store Facilities Operating Trends by Market (Unaudited)
 
      Three Months Ended December 31,   Year Ended December 31,
2018   2017   Change 2018   2017   Change
(Amounts in thousands, except for weighted average data)
 
Revenues:
Los Angeles $ 85,617 $ 82,881 3.3 % $ 339,037 $ 327,326 3.6 %
San Francisco 48,214 47,479 1.5 % 192,620 188,139 2.4 %
New York 35,416 34,517 2.6 % 140,463 136,654 2.8 %
Seattle-Tacoma 26,139 25,964 0.7 % 104,659 102,810 1.8 %
Washington DC 26,566 26,173 1.5 % 105,339 105,228 0.1 %
Miami 24,062 24,130 (0.3 )% 96,900 95,726 1.2 %
Chicago 29,230 29,766 (1.8 )% 117,715 120,500 (2.3 )%
Atlanta 21,250 20,877 1.8 % 84,275 82,534 2.1 %
Dallas-Ft. Worth 15,711 16,130 (2.6 )% 63,393 65,070 (2.6 )%
Houston 16,006 16,409 (2.5 )% 65,155 64,639 0.8 %
Philadelphia 14,599 13,994 4.3 % 57,469 55,759 3.1 %
Orlando-Daytona 13,643 13,461 1.4 % 54,635 52,700 3.7 %
West Palm Beach 11,674 11,628 0.4 % 46,614 45,650 2.1 %
Tampa 10,951 10,991 (0.4 )% 44,004 43,484 1.2 %
Portland 9,815 9,917 (1.0 )% 39,603 39,997 (1.0 )%
All other markets   173,007   170,847 1.3 %   690,874   683,211 1.1 %
Total revenues $ 561,900 $ 555,164 1.2 % $ 2,242,755 $ 2,209,427 1.5 %
 
Net operating income:
Los Angeles $ 72,351 $ 70,364 2.8 % $ 280,907 $ 272,106 3.2 %
San Francisco 39,909 39,742 0.4 % 156,691 153,787 1.9 %
New York 28,664 27,814 3.1 % 101,662 99,143 2.5 %
Seattle-Tacoma 20,988 21,110 (0.6 )% 82,007 81,271 0.9 %
Washington DC 20,806 20,370 2.1 % 78,780 79,292 (0.6 )%
Miami 21,976 22,003 (0.1 )% 72,881 72,307 0.8 %
Chicago 18,791 20,164 (6.8 )% 65,155 70,445 (7.5 )%
Atlanta 16,606 16,222 2.4 % 62,500 61,110 2.3 %
Dallas-Ft. Worth 12,906 13,754 (6.2 )% 44,642 46,572 (4.1 )%
Houston 10,650 10,453 1.9 % 43,039 42,546 1.2 %
Philadelphia 10,553 9,869 6.9 % 40,456 39,485 2.5 %
Orlando-Daytona 10,859 10,827 0.3 % 40,240 38,951 3.3 %
West Palm Beach 8,986 8,873 1.3 % 34,806 33,868 2.8 %
Tampa 8,552 8,744 (2.2 )% 31,796 31,591 0.6 %
Portland 7,864 8,021 (2.0 )% 30,767 31,304 (1.7 )%
All other markets   128,345   128,573 (0.2 )%   496,906   493,875 0.6 %
Total net operating income $ 438,806 $ 436,903 0.4 % $ 1,663,235 $ 1,647,653 0.9 %
 

Same Store Facilities Operating Trends by Market

 
        Three Months Ended December 31,   Year Ended December 31,
  2018   2017   Change 2018   2017   Change
Weighted average square foot
occupancy:
Los Angeles 94.8 % 95.2 % (0.4 )% 95.2 % 95.7 % (0.5 )%
San Francisco 93.6 % 94.5 % (1.0 )% 94.5 % 95.2 % (0.7 )%
New York 93.8 % 94.1 % (0.3 )% 94.3 % 94.3 % 0.0 %
Seattle-Tacoma 92.0 % 93.2 % (1.3 )% 93.2 % 94.5 % (1.4 )%
Washington DC 91.9 % 91.3 % 0.7 % 92.4 % 92.7 % (0.3 )%
Miami 92.1 % 93.5 % (1.5 )% 92.7 % 93.5 % (0.9 )%
Chicago 90.1 % 89.8 % 0.3 % 90.3 % 91.2 % (1.0 )%
Atlanta 93.1 % 93.0 % 0.1 % 93.2 % 93.5 % (0.3 )%
Dallas-Ft. Worth 91.5 % 92.0 % (0.5 )% 91.7 % 93.3 % (1.7 )%
Houston 89.7 % 94.2 % (4.8 )% 90.8 % 91.8 % (1.1 )%
Philadelphia 94.6 % 93.6 % 1.1 % 94.8 % 94.6 % 0.2 %
Orlando-Daytona 93.0 % 94.5 % (1.6 )% 94.4 % 95.0 % (0.6 )%
West Palm Beach 93.7 % 95.2 % (1.6 )% 94.1 % 94.9 % (0.8 )%
Tampa 91.8 % 93.8 % (2.1 )% 93.0 % 94.3 % (1.4 )%
Portland 92.9 % 94.1 % (1.3 )% 94.1 % 95.3 % (1.3 )%
All other markets   92.5 %   92.5 % 0.0 %   93.1 %   93.6 % (0.5 )%
Total weighted average
square foot occupancy   92.6 %   93.1 % (0.5 )%   93.2 %   93.8 % (0.6 )%
 
Realized annual rent per
occupied square foot:
Los Angeles $ 26.08 $ 25.12 3.8 % $ 25.72 $ 24.67 4.3 %
San Francisco 26.43 25.71 2.8 % 26.15 25.30 3.4 %
New York 25.49 24.80 2.8 % 25.17 24.50 2.7 %
Seattle-Tacoma 20.28 19.87 2.1 % 20.03 19.39 3.3 %
Washington DC 21.65 21.44 1.0 % 21.41 21.16 1.2 %
Miami 19.73 19.47 1.3 % 19.77 19.36 2.1 %
Chicago 15.24 15.61 (2.4 )% 15.33 15.56 (1.5 )%
Atlanta 13.32 13.13 1.4 % 13.19 12.89 2.3 %
Dallas-Ft. Worth 13.23 13.53 (2.2 )% 13.34 13.46 (0.9 )%
Houston 14.23 13.85 2.7 % 14.32 14.06 1.8 %
Philadelphia 16.39 15.86 3.3 % 16.10 15.66 2.8 %
Orlando-Daytona 14.06 13.64 3.1 % 13.88 13.31 4.3 %
West Palm Beach 18.71 18.31 2.2 % 18.59 18.08 2.8 %
Tampa 14.36 14.09 1.9 % 14.25 13.90 2.5 %
Portland 18.76 18.72 0.2 % 18.70 18.61 0.5 %
All other markets   14.37     14.20   1.2 %   14.27     14.03   1.7 %
Total realized rent per
occupied square foot $ 17.68   $ 17.37   1.8 % $ 17.54   $ 17.15   2.3 %
 

Same Store Facilities Operating Trends by Market

 
      Three Months Ended December 31,   Year Ended December 31,
2018   2017   Change 2018   2017   Change
REVPAF:
Los Angeles $ 24.72 $ 23.91 3.4 % $ 24.48 $ 23.60 3.7 %
San Francisco 24.75 24.30 1.9 % 24.71 24.10 2.5 %
New York 23.91 23.33 2.5 % 23.74 23.10 2.8 %
Seattle-Tacoma 18.66 18.53 0.7 % 18.67 18.31 2.0 %
Washington DC 19.89 19.57 1.6 % 19.78 19.62 0.8 %
Miami 18.18 18.20 (0.1 )% 18.32 18.10 1.2 %
Chicago 13.73 14.02 (2.1 )% 13.84 14.19 (2.5 )%
Atlanta 12.40 12.21 1.6 % 12.30 12.06 2.0 %
Dallas-Ft. Worth 12.10 12.45 (2.8 )% 12.23 12.57 (2.7 )%
Houston 12.76 13.04 (2.1 )% 13.00 12.91 0.7 %
Philadelphia 15.51 14.85 4.4 % 15.26 14.81 3.0 %
Orlando-Daytona 13.08 12.89 1.5 % 13.10 12.65 3.6 %
West Palm Beach 17.52 17.43 0.5 % 17.50 17.16 2.0 %
Tampa 13.19 13.22 (0.2 )% 13.26 13.11 1.1 %
Portland 17.43 17.61 (1.0 )% 17.59 17.74 (0.8 )%
All other markets   13.30   13.13 1.3 %   13.28   13.13 1.1 %
Total REVPAF $ 16.38 $ 16.17 1.3 % $ 16.35 $ 16.09 1.6 %
 

Property Operations – Non Same Store Facilities

The Non Same Store Facilities at December 31, 2018 represent 383
facilities that were not stabilized with respect to occupancies or
rental rates since January 1, 2016 or that we did not own as of January
1, 2016. The following table summarizes operating data with respect to
the Non Same Store Facilities (unaudited). Additional data and metrics
with respect to these facilities is included in the MD&A in our December
31, 2018 Form 10-K.

 
NON SAME STORE       Three Months Ended December 31,   Year Ended December 31,
FACILITIES 2018   2017   Change 2018   2017   Change
 
(Dollar amounts in thousands, except for per square foot amounts)
Revenues:
2018 acquisitions $ 2,879 $ $ 2,879 $ 5,167 $ $ 5,167
2017 acquisitions 7,319 2,704 4,615 28,704 5,577 23,127
2016 acquisitions 9,945 9,427 518 39,166 36,336 2,830
2016 – 2018 new developments 11,460 6,310 5,150 37,625 17,391 20,234
2013 – 2015 new developments 6,842 6,470 372 26,725 24,910 1,815
Other facilities   53,903   54,143   (240 )   217,465   218,792   (1,327 )
Total revenues   92,348   79,054   13,294     354,852   303,006   51,846  
 
Cost of operations before

depreciation and amortization
expense:

2018 acquisitions 1,276 1,276 2,141 2,141
2017 acquisitions 2,225 993 1,232 9,669 2,006 7,663
2016 acquisitions 2,886 3,345 (459 ) 13,523 13,693 (170 )
2016 – 2018 new developments 6,737 3,028 3,709 22,120 11,433 10,687
2013 – 2015 new developments 1,714 2,038 (324 ) 8,031 8,093 (62 )
Other facilities   12,099   13,480   (1,381 )   60,727   60,634   93  
Total cost of operations   26,937   22,884   4,053     116,211   95,859   20,352  
 
Net operating income:
2018 acquisitions 1,603 1,603 3,026 3,026
2017 acquisitions 5,094 1,711 3,383 19,035 3,571 15,464
2016 acquisitions 7,059 6,082 977 25,643 22,643 3,000
2016 – 2018 new developments 4,723 3,282 1,441 15,505 5,958 9,547
2013 – 2015 new developments 5,128 4,432 696 18,694 16,817 1,877
Other facilities   41,804   40,663   1,141     156,738   158,158   (1,420 )
Net operating income (a) $ 65,411 $ 56,170 $ 9,241   $ 238,641 $ 207,147 $ 31,494  
  (a)   See attached reconciliation of self-storage net operating income
(“NOI”) to net income.

Investing and Capital Activities

During the three months ended December 31, 2018, we acquired nine
self-storage facilities (two each in Georgia and Nebraska and one each
in Colorado, Indiana, Ohio, Oklahoma and Washington) with 0.6 million
net rentable square feet for $73.2 million. During 2018, we acquired 25
self-storage facilities (six in Minnesota, three in Nebraska, two each
in Georgia, Indiana, Ohio, South Carolina, Tennessee and Texas, and one
each in Colorado, Kentucky, Oklahoma and Washington) with 1.6 million
net rentable square feet for $181.0 million. Subsequent to December 31,
2018, we acquired or were under contract to acquire 14 self-storage
facilities (nine in Virginia and one each in Colorado, Florida, Georgia,
Kentucky and Michigan) with 0.9 million net rentable square feet for
$102.4 million.

During the three months ended December 31, 2018, we opened two newly
developed facilities and various expansion projects (0.6 million net
rentable square feet – 0.2 million in Texas, 0.1 million each in Florida
and Virginia and 0.2 million in other states) costing $70 million.
During 2018, we completed 18 newly developed facilities and various
expansion projects (3.0 million net rentable square feet – 1.2 million
in Texas, 0.6 million in Colorado and 1.2 million in other states)
costing an aggregate of $348 million. At December 31, 2018, we had
various facilities in development (1.7 million net rentable square feet)
estimated to cost $253 million and various expansion projects (3.5
million net rentable square feet) estimated to cost $354 million. Our
aggregate 5.2 million net rentable square foot pipeline of development
and expansion facilities includes 1.4 million in Texas, 1.0 million in
Florida, 0.8 million in Minnesota, 0.4 million in Colorado, 0.3 million
each in California and North Carolina and 1.0 million in other states.
The remaining $322 million of development costs for these projects is
expected to be incurred primarily in the next 18 months.

On October 15, 2018, Shurgard Europe completed an initial global
offering (the “Offering”), and its shares commenced trading on Euronext
Brussels under the “SHUR” symbol. In the Offering, Shurgard Europe
issued 25.0 million of its common shares to third parties at a price of
€23 per share. Our equity interest, comprised of a direct and indirect
pro-rata ownership interest in 31.3 million shares, decreased from 49%
to 35.2% as a result of the Offering. While we did not sell any shares
in the Offering, and we have no current plans to do so, we recorded a
gain on disposition of $151.6 million in the three months ending
December 31, 2018, as if we had sold a proportionate share of our
investment in Shurgard Europe. Shurgard Europe’s publicly reported
information can be obtained on its website, https://corporate.shurgard.eu
and on the website of the Luxembourg Stock Exchange, http://www.bourse.lu.

On October 18, 2018, we sold our property in West London to Shurgard
Europe for $42.1 million in cash and recorded a gain on disposition of
$31.5 million in the three months ended December 31, 2018.

On February 22, 2019, we called for redemption, and on March 28, 2019,
we will redeem, our 6.375% Series Y Preferred Shares for $285 million.

Distributions Declared

On February 19, 2019, our Board of Trustees declared a regular common
quarterly dividend of $2.00 per common share. The Board also declared
dividends with respect to our various series of preferred shares. All
the dividends are payable on March 28, 2019 to shareholders of record as
of March 13, 2019.

Fourth Quarter Conference Call

A conference call is scheduled for February 27, 2019 at 10:00 a.m. (PST)
to discuss the fourth quarter earnings results. The domestic dial-in
number is (866) 406-5408, and the international dial-in number is (973)
582-2770 (conference ID number for either domestic or international is
3294554). A simultaneous audio webcast may be accessed by using the link
at www.publicstorage.com
under “Company Info, Investor Relations, News and Events, Events
Calendar.” A replay of the conference call may be accessed through March
13, 2019 by calling (800) 585-8367 (domestic), (404) 537-3406
(international) or by using the link at www.publicstorage.com
under “Company Info, Investor Relations, News and Events, Events
Calendar.” All forms of replay utilize conference ID number 3294554.

About Public Storage

Public Storage, a member of the S&P 500 and FT Global 500, is a REIT
that primarily acquires, develops, owns and operates self-storage
facilities. The Company’s headquarters are located in Glendale,
California.

Contacts

Ryan Burke
(818) 244-8080, Ext. 1141

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