UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
_____________________
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 2 5 , 201 8

PUBLIC STORAGE
(Exact Name of Registrant as Specified in its Charter)

Maryland	001-33519	95-3551121	
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)	
701 Western Avenue, Glendale, California	91201-2349	
(Address of Principal Executive Offices)	(Zip Code)	
(818) 244-8080
(Registrant's telephone number, including area code)
﻿
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[  ]	Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
[  ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
[  ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
[  ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 
 
The information in Item 2.02 of this Form 8-K and the Exhibit attached hereto pursuant to Item 9.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 2.02 Results of Operations and Financial Condition and Exhibits
On April 25, 2018, Public Storage announced its financial results for the quarter ended March 31, 2018.  The full text of the press release issued in connection with the announcement is included in Exhibit 99.1 to this Current Report on Form 8-K.
Item 5.07 Submission of Matters to a Vote of Security Holders
Four proposals were submitted to Public Storage shareholders for a vote at the 2018 Annual Meeting of Shareholders held on April 25, 2018.  The proposals are described in detail in our proxy statement for the 2018 Annual Meeting filed with the Securities and Exchange Commission on March 16 , 2018.  The final results for the votes for each proposal are set forth below:

	1.		Our shareholders elected nine trustees to the Board of Trustees of Public Storage, to hold office until the 201 9 Annual Meeting of Shareholders or until their successors are duly qualified and elected.  The votes for each nominee were as follows:	
﻿	 	 	 	 	 	
Name	For	Against	Abstain	Broker Non-Votes	Uncast	
Ronald L. Havner, Jr.	140,679,167	7,944,457	4,766,641	8,852,327	0	
Tamara Hughes Gustavson	148,616,558	4,649,506	124,201	8,852,327	0	
Uri P. Harkham	147,765,334	5,493,370	131,561	8,852,327	0	
Leslie S. Heisz	152,151,582	1,109,430	129,253	8, 852,327	0	
B. Wayne Hughes, Jr.	148,346,638	4,915,054	128,573	8,852,327	0	
Avedick B. Poladian	151,597,103	1,652,982	140,180	8, 852,327	0	
Gary E. Pruitt	151,152,415	2,106,651	131,199	8,852,327	0	
Ronald P. Spogli	146,813,895	6,438,547	137,823	8, 852,327	0	
Daniel C. Staton	147,161,197	6,098,298	130,770	8,852,327	0	
﻿
	2.		Our shareholders approved the advisory vote on executive compensation.  The votes were as follows:	
6,	 	 	 	 	
For	Against	Abstain	Broker Non-Votes	Uncast	
142,734,439	10,429,233	226,593	8,852,327	0	
﻿
	3.		Our shareholders voted to amend our Declaration of Trust.  The votes were as follows:	
﻿	 	 	 	 	
For	Against	Abstain	Broker Non-Votes	Uncast	
153,108,271	97,050	184,944	8,852,327	0	
﻿
	4.		Our shareholders ratified the appointment of Ernst & Young LLP as Public Storage’s independent registered public accounting firm for the fiscal year ending December 31, 2018.  The votes were as follows:	
﻿	 	 	 	 	
For	Against	Abstain	Broker Non-Votes	Uncast	
160,557,247	1,539,476	145,869	0	0	
﻿
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 – Press Release dated April 25, 2018

 
 
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

4	 	
﻿	PUBLIC STORAGE	
﻿	 	
﻿	By:   /s/ John Reyes                 	

Date: April 2 5 , 201 8	John Reyes
Chief Financial Officer	
﻿

 
 
INDEX TO EXHIBITS

﻿	 	 	
﻿	 	 	
Exhibit No.	 	Description	
﻿	 	
99.1	 	Public Storage Earnings Press Release dated April 26, 201 7 .	
﻿

 
News Release
﻿
Public Storage
701 Western Avenue
Glendale, CA 91201-2349
﻿ PublicStorage.com
﻿
﻿

﻿	 	
For Release	Immediately	
Date	April 25 , 201 8	
Contact	Ryan Burke	
﻿	(818) 244-8080, Ext. 1141	
﻿
Public Storage Reports Results for the F irst Quarter Ended   March 3 1 , 201 8
GLENDALE ,   California – Public Storage (NYSE:PSA) announced today operating results for the quarter ended   March 31 , 201 8 . 
Operating Results for the Three Months Ended March 31, 2018
For the three months ended March 31, 2018, net income allocable to our common shareholders was $287.8 million or $1.65 per diluted common share, compared to $281.1 million or $1.62 per diluted common share in 2017 representing an increase of $6.7 million or $0.03 per diluted common share .  The increase is due primarily to i) a $13.6 million increase in self-storage net operating income (described below), ii) our $10.9 million equity share of a gain recorded by PS Business Parks in the three months ended March 31, 2018 and iii) a $6.0 million reduction in income allocated to our preferred shareholders.  These increases were offset partially by i) $7.8 million in additional share based compensation included in general and administrative expense in the three months ended March 31, 2018 due to the upcoming retirement of our CEO and CFO, ii) a $7.1 million increase in interest expense due to higher debt balances and iii) a $6.3 million increase in foreign exchange losses associated with our euro denominated debt.
The $13.6 million increase in self-storage net operating income is a result of a $6.5 million increase in our Same Store Facilities (as defined below) and a $7.1 million increase in our Non Same Store Facilities (as defined below).  Revenues for the Same Store Facilities increased 2.1% or $11.5 million in the three months ended March 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 3.3% or $5.0 million in the three months ended March 31, 2018 as compared to 2017, due primarily to increased property taxes and property manager payroll.  The increase in net operating income for the Non Same Store Facilities is due primarily to the impact of 127 self-storage facilities acquired and developed since January 2016.  
Funds from Operations
For the three months ended March 31, 2018, funds from operations (“FFO”) was $2.37 per diluted common share, as compared to $2.34 in 2017, representing an increase of 1.3%.  FFO is a non-GAAP (generally accepted accounting principles) term defined by the National Association of Real Estate Investment Trusts and generally represents net income before depreciation, gains and losses and impairment charges with respect to real estate assets.
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 and ii) $7.8 million in additional share-based compensation included in general and administrative expense in the three months ended March 31, 2018 due to the upcoming retirement of our CEO and CFO.  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.  

1

 

﻿
The following table reconciles from FFO per share to Core FFO per share (unaudited):
﻿
﻿	 	 	 	 	 	 	 	 	 	
﻿	 	Three Months Ended March 31,	 	
﻿	 	 	 	 	 	 	 	Percentage	 	
﻿	 	2018	 	2017	 	Change	 	
﻿	 	 	 	 	 	 	 	 	 	
FFO per share	$	2.37 	 	$	2.34 	 	1.3% 	 	
Eliminate the per share impact of	 	 	 	 	 	 	 	 	
items excluded from Core FFO, including	 	 	 	 	 	 	 	 	
our equity share from investments:	 	 	 	 	 	 	 	 	
Foreign currency exchange loss	 	0.07 	 	 	0.03 	 	 	 	
Accelerated expense of executive officer	 	 	 	 	 	 	 	 	
share based awards due to upcoming retirement	 	0.04 	 	 	 -	 	 	 	
Core FFO per share	$	2.48 	 	$	2.37 	 	4.6% 	 	
﻿	 	 	 	 	 	 	 	 	 	
﻿

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 Same Store pool increased from 2,042 facilities at December 31, 2017 to 2,052 facilities at March 31, 2018.   The following table summarizes the historical operating results of these 2,052 facilities (131.6 million net rentable square feet) that represent approximately 83% of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at March 31, 2018.    
﻿
﻿	 	 	 	 	 	 	 	
Selected Operating Data for the Same	 	 	 	 	 	 	 	
Store Facilities (2,052 facilities)	 	 	 	 	 	 	 	
(unaudited):	 	 	 	 	 	 	 	
﻿	Three Months Ended March 31,	
﻿	 	 	 	 	 	 	Percentage	
﻿	2018	 	2017	 	Change	
﻿	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	
Revenues:	 	 	 	 	 	 	 	
Rental income	$	525,184 	 	$	514,263 	 	2.1% 	
Late charges and administrative fees	 	24,719 	 	 	24,173 	 	2.3% 	
Total revenues (a)	 	549,903 	 	 	538,436 	 	2.1% 	
﻿	 	 	 	 	 	 	 	
Cost of operations:	 	 	 	 	 	 	 	
Property taxes	 	58,582 	 	 	56,050 	 	4.5% 	
On-site property manager payroll	 	28,729 	 	 	27,577 	 	4.2% 	
Supervisory payroll	 	9,617 	 	 	10,165 	 	(5.4)%	
Repairs and maintenance	 	9,425 	 	 	9,702 	 	(2.9)%	
Snow removal	 	2,139 	 	 	2,030 	 	5.4% 	
Utilities	 	10,847 	 	 	10,235 	 	6.0% 	
Advertising and selling	 	6,538 	 	 	6,816 	 	(4.1)%	
Other direct property costs	 	15,066 	 	 	14,303 	 	5.3% 	
Allocated overhead	 	13,108 	 	 	12,222 	 	7.2% 	
Total cost of operations (a)	 	154,051 	 	 	149,100 	 	3.3% 	
Net operating income (b)	$	395,852 	 	$	389,336 	 	1.7% 	
﻿	 	 	 	 	 	 	 	
Gross margin	 	72.0% 	 	 	72.3% 	 	(0.4)%	
﻿	 	 	 	 	 	 	 	
Weighted average for the period:	 	 	 	 	 	 	 	
Square foot occupancy	 	92.3% 	 	 	93.1% 	 	(0.9)%	
Realized annual rental income per (c):	 	 	 	 	 	 	 	
Occupied square foot	$	17.30 	 	$	16.79 	 	3.0% 	
Available square foot (“REVPAF”)	$	15.96 	 	$	15.63 	 	2.1% 	
At March 31:	 	 	 	 	 	 	 	
Square foot occupancy	 	92.1% 	 	 	93.2% 	 	(1.2)%	
Annual contract rent per occupied	 	 	 	 	 	 	 	
square foot (d)	$	17.81 	 	$	17.35 	 	2.7% 	
﻿

	(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   net operating income (“NOI”)   to operating income.	

3

 
 
	(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	$	549,903 	 	 	 	 	 	 	 	 	 	 	 	 	
2017	$	538,436 	 	$	551,522 	 	$	569,853 	 	$	556,999 	 	$	2,216,810 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total cost of operations:	 	 	 	 	 	 	 	 	 	 	 	 	
2018	$	154,051 	 	 	 	 	 	 	 	 	 	 	 	 	
2017	$	149,100 	 	$	147,283 	 	$	148,568 	 	$	118,606 	 	$	563,557 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property taxes:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2018	$	58,582 	 	 	 	 	 	 	 	 	 	 	 	 	
2017	$	56,050 	 	$	56,180 	 	$	56,016 	 	$	32,394 	 	$	200,640 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Repairs and maintenance, including	 	 	 	 	 	 	 	 	 	 	 	 	
snow removal expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2018	$	11,564 	 	 	 	 	 	 	 	 	 	 	 	 	
2017	$	11,732 	 	$	11,422 	 	$	11,450 	 	$	12,007 	 	$	46,611 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Advertising and selling expense:	 	 	 	 	 	 	 	 	 	 	 	 	
2018	$	6,538 	 	 	 	 	 	 	 	 	 	 	 	 	
2017	$	6,816 	 	$	8,158 	 	$	6,987 	 	$	6,821 	 	$	28,782 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
REVPAF:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2018	$	15.96 	 	 	 	 	 	 	 	 	 	 	 	 	
2017	$	15.63 	 	$	16.03 	 	$	16.54 	 	$	16.17 	 	$	16.09 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average realized annual	 	 	 	 	 	 	 	 	 	 	 	 	
rent per occupied square foot:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2018	$	17.30 	 	 	 	 	 	 	 	 	 	 	 	 	
2017	$	16.79 	 	$	16.95 	 	$	17.49 	 	$	17.37 	 	$	17.15 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average occupancy levels	 	 	 	 	 	 	 	 	
for the period:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2018	 	92.3% 	 	 	 	 	 	 	 	 	 	 	 	 	
2017	 	93.1% 	 	 	94.6% 	 	 	94.6% 	 	 	93.1% 	 	 	93.8% 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

4

 

Property Operations – Non Same Store Facilities
The Non Same Store Facilities at March 31, 2018 represent 34 1 facilities that were not stabilized with respect to occupancies or rental rates since January 1, 201 6   or that we did not own as of January 1, 201 6 .  The following table summarizes operating data with respect to the Non Same Store Facilities (unaudited):
﻿
﻿	 	 	 	 	 	 	 	 	
NON SAME STORE	Three Months Ended March 31,	
FACILITIES	2018	 	2017	 	Change	
﻿	 	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	 	
Revenues:	 	 	 	 	 	 	 	 	
2018 acquisitions	$	67 	 	$	 -	 	$	67 	
2017 acquisitions	 	6,860 	 	 	339 	 	 	6,521 	
2016 acquisitions	 	9,429 	 	 	8,581 	 	 	848 	
2016 - 2018 new developments	 	7,120 	 	 	2,327 	 	 	4,793 	
2013 - 2015 new developments	 	6,401 	 	 	5,798 	 	 	603 	
Other facilities	 	51,757 	 	 	52,297 	 	 	(540)	
    Total revenues	 	81,634 	 	 	69,342 	 	 	12,292 	
﻿	 	 	 	 	 	 	 	 	
Cost of operations before depreciation	 	 	 	 	 	 	 	 	
and amortization expense:	 	 	 	 	 	 	 	 	
2018 acquisitions	 	22 	 	 	 -	 	 	22 	
2017 acquisitions	 	2,507 	 	 	151 	 	 	2,356 	
2016 acquisitions	 	3,637 	 	 	3,482 	 	 	155 	
2016 - 2018 new developments	 	4,055 	 	 	2,296 	 	 	1,759 	
2013 - 2015 new developments	 	2,099 	 	 	1,867 	 	 	232 	
Other facilities	 	15,816 	 	 	15,082 	 	 	734 	
    Total cost of operations	 	28,136 	 	 	22,878 	 	 	5,258 	
﻿	 	 	 	 	 	 	 	 	
Net operating income:	 	 	 	 	 	 	 	 	
2018 acquisitions	 	45 	 	 	 -	 	 	45 	
2017 acquisitions	 	4,353 	 	 	188 	 	 	4,165 	
2016 acquisitions	 	5,792 	 	 	5,099 	 	 	693 	
2016 - 2018 new developments	 	3,065 	 	 	31 	 	 	3,034 	
2013 - 2015 new developments	 	4,302 	 	 	3,931 	 	 	371 	
Other facilities	 	35,941 	 	 	37,215 	 	 	(1,274)	
    Net operating income (a)	$	53,498 	 	$	46,464 	 	$	7,034 	
﻿	 	 	 	 	 	 	 	 	
At March 31:	 	 	 	 	 	 	 	 	
Square foot occupancy:	 	 	 	 	 	 	 	 	
2018 acquisitions	 	71.5% 	 	 	 -	 	 	 -	
2017 acquisitions	 	88.8% 	 	 	89.7% 	 	 	(1.0)%	
2016 acquisitions	 	87.2% 	 	 	85.9% 	 	 	1.5% 	
2016 - 2018 new developments	 	56.5% 	 	 	43.1% 	 	 	31.1% 	
2013 - 2015 new developments	 	90.4% 	 	 	89.8% 	 	 	0.7% 	
Other facilities	 	87.2% 	 	 	87.2% 	 	 	0.0% 	
﻿	 	82.1% 	 	 	82.4% 	 	 	(0.4)%	
Annual contract rent per occupied square foot:	 	 	 	 	 	 	 	 	
2018 acquisitions	$	10.88 	 	$	 -	 	 	 -	
2017 acquisitions	 	14.39 	 	 	10.81 	 	 	33.1% 	
2016 acquisitions	 	10.19 	 	 	9.86 	 	 	3.3% 	
2016 - 2018 new developments	 	11.83 	 	 	12.69 	 	 	(6.8)%	
2013 - 2015 new developments	 	14.88 	 	 	13.95 	 	 	6.7% 	
Other facilities	 	16.97 	 	 	16.80 	 	 	1.0% 	
﻿	$	14.79 	 	$	14.92 	 	 	(0.9)%	
﻿	 	 	 	 	 	 	 	 	
﻿

5

 

﻿	 	 	 	 	 	 	 	 	
NON SAME STORE	Three Months Ended March 31,	
FACILITIES (Continued)	2018	 	2017	 	Change	
﻿	 	 	 	 	 	 	 	 	
At March 31:	 	 	 	 	 	 	 	 	
Number of facilities:	 	 	 	 	 	 	 	 	
2018 acquisitions	 	2 	 	 	 -	 	 	2 	
2017 acquisitions	 	34 	 	 	4 	 	 	30 	
2016 acquisitions	 	55 	 	 	55 	 	 	 -	
2016 - 2018 new developments	 	36 	 	 	18 	 	 	18 	
2013 - 2015 new developments	 	20 	 	 	20 	 	 	 -	
Other facilities	 	194 	 	 	194 	 	 	 -	
﻿	 	341 	 	 	291 	 	 	50 	
Net rentable square feet (in thousands):	 	 	 	 	 	 	
2018 acquisitions	 	181 	 	 	 -	 	 	181 	
2017 acquisitions	 	2,114 	 	 	214 	 	 	1,900 	
2016 acquisitions	 	4,177 	 	 	4,121 	 	 	56 	
2016 - 2018 new developments	 	4,632 	 	 	2,470 	 	 	2,162 	
2013 - 2015 new developments	 	1,877 	 	 	1,877 	 	 	 -	
Other facilities	 	14,584 	 	 	14,122 	 	 	462 	
﻿	 	27,565 	 	 	22,804 	 	 	4,761 	
﻿
	(a)		See attached reconciliation of self-storage NOI to operating income.	
﻿
Investing and Capital Markets   Activities
During the three months ended March 31, 2018, we acquired two self-storage facilities (one each in Nebraska and Tennessee) with 0.2 million net rentable square feet for $18.0 million. At March 31, 2018, we were under contract to acquire three self-storage facilities (one each in Indiana, Kentucky and South Carolina) with 0.2 million net rentable square feet for $19 million.
During the three months ended March 31, 2018, we completed four newly developed facilities and various expansion projects (0.5 million net rentable square feet) costing $60 million.  At March 31, 2018, we had various facilities in development (2.7 million net rentable square feet) estimated to cost $381 million and various expansion projects (2.3 million net rentable square feet) estimated to cost $281 million.  The remaining $382 million of development costs for these projects is expected to be incurred primarily in the next 18 months.
Distributions Declared
On April 25 , 201 8 , 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 June   2 8 , 201 8 to shareholders of record as of June 1 3 , 201 8 .
First Quarter Conference Call
A conference call is scheduled for April 26, 2018 at 11:00 a.m. (PDT) to discuss the first 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 3808049). 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 May 10, 2018 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 3808049.
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.  At March 31, 2018, we had interests in 2, 392 self-storage facilities located in 38 states with approximately 159 million net rentable square feet in the United States and 223 storage facilities located in seven Western European nations with approximately 12 million net rentable square feet operated under the “Shurgard” brand.  We also own a 42% common equity interest in PS Business Parks, Inc. (NYSE:PSB) which owned and operated approximately 28 million rentable square feet of commercial space at March 31, 2018 .

6

 
 
Additional information about Public Storage is available on our website, www.publicstorage.com .
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements in this press release, other than statements of historical fact, are forward-looking statements which may be identified by the use of the words “expects,” “believes,” “anticipates,” “should,” “estimates” and similar expressions. These forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results and performance to be materially different from those expressed or implied in the forward-looking statements.  Factors and risks that may impact future results and performance include, but are not limited to, those described in Part 1, Item 1A, “Risk Factors” in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 1, 2018 and in our other filings with the SEC and the following: general risks associated with the ownership and operation of real estate, including changes in demand, risk related to development of self-storage facilities, potential liability for environmental contamination, natural disasters and adverse changes in laws and regulations governing property tax, real estate and zoning; risks associated with downturns in the national and local economies in the markets in which we operate, including risks related to current economic conditions and the economic health of our customers; the impact of competition from new and existing self-storage and commercial facilities and other storage alternatives; difficulties in our ability to successfully evaluate, finance, integrate into our existing operations and manage acquired and developed properties; risks associated with international operations including, but not limited to, unfavorable foreign currency rate fluctuations, changes in tax laws, and local and global economic uncertainty that could adversely affect our earnings and cash flows; risks related to our participation in joint ventures; the impact of the regulatory environment as well as national, state and local laws and regulations including, without limitation, those governing environmental, taxes, our tenant reinsurance business and labor, and risks related to the impact of new laws and regulations; risks of increased tax expense associated either with a possible failure by us to qualify as a REIT, or with challenges to the determination of taxable income for our taxable REIT subsidiaries; changes in federal or state tax laws related to the taxation of REITs and other corporations; security breaches or a failure of our networks, systems or technology could adversely impact our business, customer and employee relationships; risks associated with the self-insurance of certain business risks, including property and casualty insurance, employee health insurance and workers compensation liabilities; difficulties in raising capital at a reasonable cost; delays in the development process; ongoing litigation and other legal and regulatory actions which may divert management’s time and attention, require us to pay damages and expenses or restrict the operation of our business; and economic uncertainty due to the impact of war or terrorism. These forward-looking statements speak only as of the date of this press release.  All of our forward-looking statements, including those in this press release, are qualified in their entirety by this statement.  We expressly disclaim any obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, new estimates, or other factors, events or circumstances after the date of this press release, except where expressly required by law.  Given these risks and uncertainties, you should not rely on any forward-looking statements in this press release, or which management may make orally or in writing from time to time, as predictions of future events nor guarantees of future performanc e .
﻿
﻿

7

 
PUBLIC STORAGE
SELECTED INCOME STATEMENT DATA
(Amounts in thousands, except per share data)
(Unaudited)

 
﻿
﻿
﻿
﻿	 	 	 	 	 	 	
﻿	 	Three Months Ended	
﻿	 	March 31,	
﻿	 	2018	 	2017	
﻿	 	 	 	 	 	 	
Revenues:	 	 	 	 	 	 	
Self-storage facilities	 	$	631,537 	 	$	607,778 	
Ancillary operations	 	 	38,387 	 	 	37,769 	
﻿	 	 	669,924 	 	 	645,547 	
﻿	 	 	 	 	 	 	
Expenses:	 	 	 	 	 	 	
Self-storage cost of operations	 	 	182,187 	 	 	171,978 	
Ancillary cost of operations	 	 	10,640 	 	 	10,924 	
Depreciation and amortization	 	 	117,979 	 	 	110,929 	
General and administrative	 	 	31,520 	 	 	25,028 	
﻿	 	 	342,326 	 	 	318,859 	
﻿	 	 	 	 	 	 	
Operating income	 	 	327,598 	 	 	326,688 	
﻿	 	 	 	 	 	 	
Other income (expense):	 	 	 	 	 	 	
Interest and other income	 	 	5,544 	 	 	3,998 	
Interest expense	 	 	(8,107)	 	 	(1,048)	
Equity in earnings of unconsolidated real estate entities	30,795 	 	 	19,949 	
Gain on real estate investment sales	 	 	424 	 	 	 -	
Foreign currency exchange loss	 	 	(11,818)	 	 	(5,566)	
Net income	 	 	344,436 	 	 	344,021 	
Allocation to noncontrolling interests	 	 	(1,439)	 	 	(1,579)	
Net income allocable to Public Storage shareholders	 	 	342,997 	 	 	342,442 	
Allocation of net income to:	 	 	 	 	 	 	
Preferred shareholders – distributions	 	 	(54,081)	 	 	(60,121)	
Restricted share units 	 	 	(1,097)	 	 	(1,190)	
Net income allocable to common shareholders	 	$	287,819 	 	$	281,131 	
﻿	 	 	 	 	 	 	
Per common share:	 	 	 	 	 	 	
Net income per common share – Basic	 	$	1.66 	 	$	1.62 	
Net income per common share – Diluted	 	$	1.65 	 	$	1.62 	
Weighted average common shares – Basic	 	 	173,892 	 	 	173,364 	
Weighted average common shares – Diluted	 	 	174,148 	 	 	174,069 	
﻿

8

 
PUBLIC STORAGE
SELECTED BALANCE SHEET DATA
(Amounts in thousands, except share and per share data)

 
﻿
﻿
﻿	 	 	 	 	 	 	
﻿	 	March 31, 2018	 	December 31, 2017	
ASSETS	 	(Unaudited)	 	 	 	
﻿	 	 	 	 	 	 	
Cash and equivalents	 	$	363,030 	 	$	433,376 	
﻿	 	 	 	 	 	 	
Operating real estate facilities:	 	 	 	 	 	 	
Land and buildings, at cost	 	 	14,766,684 	 	 	14,665,989 	
Accumulated depreciation	 	 	(5,811,286)	 	 	(5,700,331)	
﻿	 	 	8,955,398 	 	 	8,965,658 	
Construction in process	 	 	279,624 	 	 	264,441 	
Investments in unconsolidated real estate entities	 	 	746,254 	 	 	724,173 	
Goodwill and other intangible assets, net	 	 	210,733 	 	 	214,957 	
Other assets	 	 	130,481 	 	 	130,287 	
Total assets	 	$	10,685,520 	 	$	10,732,892 	
﻿	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	
LIABILITIES AND EQUITY	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	
Senior unsecured notes	 	$	1,414,144 	 	$	1,402,109 	
Mortgage notes	 	 	28,767 	 	 	29,213 	
Accrued and other liabilities	 	 	326,819 	 	 	337,201 	
Total liabilities	 	 	1,769,730 	 	 	1,768,523 	
﻿	 	 	 	 	 	 	
Equity:	 	 	 	 	 	 	
Public Storage shareholders’ equity:	 	 	 	 	 	 	
Cumulative Preferred Shares, $0.01 par value, 100,000,000 shares	 	 	 	 	 	 	
authorized, 161,000 shares issued (in series) and outstanding,	 	 	 	 	 	 	
(161,000 at December 31, 2017) at liquidation preference	 	 	4,025,000 	 	 	4,025,000 	
Common Shares, $0.10 par value, 650,000,000 shares authorized,	 	 	 	 	 	 	
173,927,759 shares issued and outstanding, (173,853,370 shares	 	 	 	 	 	 	
at December 31, 2017)	 	 	17,393 	 	 	17,385 	
Paid-in capital	 	 	5,655,267 	 	 	5,648,399 	
Accumulated deficit	 	 	(735,806)	 	 	(675,711)	
Accumulated other comprehensive loss	 	 	(70,851)	 	 	(75,064)	
Total Public Storage shareholders’ equity	 	 	8,891,003 	 	 	8,940,009 	
Noncontrolling interests	 	 	24,787 	 	 	24,360 	
Total equity	 	 	8,915,790 	 	 	8,964,369 	
Total liabilities and equity	 	$	10,685,520 	 	$	10,732,892 	
﻿

9

 
PUBLIC STORAGE
SELECTED FINANCIAL DATA

Computation of Funds from Operations and Funds Available for Distribution
(Unaudited – amounts in thousands, except per share data)
 
﻿	 	 	 	 	 	 	 	
﻿	 	 	Three Months Ended	
﻿	 	 	March 31,	
﻿	 	 	2018	 	2017	
﻿	 	 	 	 	 	 	 	
Computation of FFO per Share:	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	
Net income allocable to common shareholders	 	 	$	287,819 	 	$	281,131 	
Eliminate items excluded from FFO:	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	 	117,979 	 	 	110,929 	
Depreciation from unconsolidated real estate investments	 	 	19,315 	 	 	17,213 	
Depreciation allocated to noncontrolling interests	 	 	 	 	 	 	 	
and restricted share unitholders	 	 	 	(918)	 	 	(962)	
Gains on sale of real estate investments, including	 	 	 	 	 	 	 	
our equity share from investments	 	 	 	(11,891)	 	 	(1,611)	
FFO allocable to common shares (a)	 	 	$	412,304 	 	$	406,700 	
Diluted weighted average common shares	 	 	 	174,148 	 	 	174,069 	
FFO per share (a)	 	 	$	2.37 	 	$	2.34 	
﻿	 	 	 	 	 	 	 	
Reconciliation of Earnings per Share to FFO per Share:	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	
Earnings per share—Diluted	 	 	$	1.65 	 	$	1.62 	
Eliminate per share amounts excluded from FFO:	 	 	 	 	 	 	 	
Depreciation and amortization allocable to	 	 	 	 	 	 	 	
common shareholders	 	 	 	0.78 	 	 	0.73 	
Gains on sale of real estate investments, including	 	 	 	 	 	 	 	
our equity share from investments and other	 	 	 	(0.06)	 	 	(0.01)	
FFO per share (a)	 	 	$	2.37 	 	$	2.34 	
﻿	 	 	 	 	 	 	 	
Computation of Funds Available for Distribution ("FAD"):	 	 	
﻿	 	 	 	 	 	 	 	
FFO allocable to common shares	 	 	$	412,304 	 	$	406,700 	
Eliminate effect of items included in FFO but not FAD:	 	 	 	 	 	 	 	
Share-based compensation expense in excess of	 	 	 	 	 	 	
(less than) cash paid	 	 	5,909 	 	 	(3,286)	
Foreign currency exchange loss	 	 	 	11,818 	 	 	5,566 	
Less: Capital expenditures to maintain real estate facilities	 	 	(24,344)	 	 	(27,050)	
﻿	 	 	 	 	 	 	 	
FAD (a)	 	 	$	405,687 	 	$	381,930 	
﻿	 	 	 	 	 	 	 	
Distributions paid to common shareholders and restricted	 	 	 	 	 	 	 	
share units	 	 	$	349,011 	 	$	348,213 	
﻿	 	 	 	 	 	 	 	
Distribution payout ratio	 	 	 	86.0% 	 	 	91.2% 	
﻿	 	 	 	 	 	 	 	
Distributions per common share	 	 	$	2.00 	 	$	2.00 	
﻿	 	 	 	 	 	 	 	
	(a)		FFO and FFO per share are non-GAAP measures defined by the National Association of Real Estate Investment Trusts and , along with the non-GAAP measure FAD, are considered helpful measures of REIT performance by REIT s and many REIT analysts. FFO represents net income before real estate depreciation, gains or losses and impairment charges, which are excluded because they are based upon historical real estate costs and assume that building values diminish ratably over time, while we believe that real estate values fluctuate due to market conditions. FAD represents FFO adjusted to exclude certain non-cash charges and to deduct capital expenditures.   We utilize FAD in evaluating our ongoing cash flow available for investment, debt repayment, and common distributions. We believe investors and analysts utilize FAD in a similar manner.     FFO and FFO per share are not a substitute for net income or earnings per share.  FFO and FAD are not substitute s for GAAP net cash flow in evaluating our liquidity or ability to pay dividends, because they exclude investing and financing activities presented on our statements of cash flows.  In addition, other REIT s may compute these measures differently, so comparisons among REIT s may not be helpful .	

10

 
PUBLIC STORAGE
SELECTED FINANCIAL DATA
 
Reconciliation of Self-Storage Net Operating Income to
Operating Income
(Unaudited – amounts in thousands)
﻿
﻿
﻿
﻿	 	 	 	 	 	 	
﻿	 	Three Months Ended	
﻿	 	March 31,	
﻿	 	2018	 	2017	
﻿	 	 	 	 	 	 	
Self-storage revenues for:	 	 	 	 	 	 	
Same Store Facilities	 	$	549,903 	 	$	538,436 	
Non Same Store Facilities	 	 	81,634 	 	 	69,342 	
Self-storage revenues	 	 	631,537 	 	 	607,778 	
﻿	 	 	 	 	 	 	
Self-storage cost of operations for:	 	 	 	 	 	 	
Same Store Facilities	 	 	154,051 	 	 	149,100 	
Non Same Store Facilities	 	 	28,136 	 	 	22,878 	
Self-storage cost of operations	 	 	182,187 	 	 	171,978 	
﻿	 	 	 	 	 	 	
Self-storage net operating income for:	 	 	 	 	 	 	
Same Store Facilities	 	 	395,852 	 	 	389,336 	
Non Same Store Facilities	 	 	53,498 	 	 	46,464 	
Self-storage net operating income (a)	 	 	449,350 	 	 	435,800 	
Ancillary revenues	 	 	38,387 	 	 	37,769 	
Ancillary cost of operations	 	 	(10,640)	 	 	(10,924)	
Depreciation and amortization	 	 	(117,979)	 	 	(110,929)	
General and administrative expense	 	 	(31,520)	 	 	(25,028)	
Operating income on our income statement	 	$	327,598 	 	$	326,688 	
﻿
	(a)		Net operating income or “NOI” is a non-GAAP financial measure that excludes the impact of depreciation and amortization expense, which is based upon historical real estate costs and assumes that building values diminish ratably over time, while we believe that real estate values fluctuate due to market condit ions.   We utilize NOI in determining current property values, evaluating property performance, and in evaluating operating trends.     We believe that investors and analysts utilize NOI in a similar manner.  NOI is not a substitute for net income, net operating cash flow, or other related GAAP financial measures, in evaluating our operating results.  This table reconciles from NOI for our self-storage facilities to the operating income presented on our income statement .	
﻿

11