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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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____________________
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FORM 8-K
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CURRENT REPORT
_____________________
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PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): October   2 5 , 2017
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PUBLIC STORAGE
(Exact Name of Registrant as Specified in its Charter)
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Maryland	001-33519	95-3551121	
(State or Other Jurisdiction of	(Commission File Number)	(I.R.S. Employer Identification No.)	
Incorporation)	   	   	
  
701 Western Avenue, Glendale, California	91201-2349	
(Address of Principal Executive Offices)	(Zip Code)	
  
(818) 244-8080
(Registrant's telephone number, including area code)
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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:
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☐	Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
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☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
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☐	Pre-commencements communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
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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
On  October   2 5 , 201 7 Public Storage announced its financial results for the quarter ended  September 30, 201 7 . The full text of the press release   issued in connection with the announcement is included as Exhibit 99.1 to this Current Report on Form 8-K.
  Item 9.01 Financial Statements and Exhibits
  (c) Exhibits
   Exhibit 99.1—Press Release dated  October  2 5 , 201 7

   

 

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SIGNATURES
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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.
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Date:  October   2 5 , 2017
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﻿	 	
PUBLIC STORAGE	
﻿	 	
﻿	 	
﻿	 	
By :	/s/ John Reyes	
﻿	John Reyes	
﻿	Chief Financial Officer	
﻿
﻿
﻿
﻿

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

﻿	 	
For Release	Immediately	
Date	October   2 5 , 201 7	
Contact	Clemente Teng	
﻿	(818) 244-8080, Ext. 1141	
﻿
Public Storage Reports Results for the Three and Nine Months Ended   September 30, 201 7
GLENDALE ,   California — Public Storage (NYSE:PSA) announced today operating results for the three and nine months ended   September 30 , 201 7 . 
Operating Results for the Three Months Ended September   3 0 , 201 7
For the three months ended September 30 , 201 7 , net income allocable to our common shareholders was $279.7 million or $1.61 per diluted common share, compared to $309.0 million or $1.78 in 201 6 representing a decrease of $29.3 million or $0.17 .     The decrease is due primarily to   a $14.7 million increase in allocation to our preferred shareholders as a result of redemption activities in the three months ended September 30, 2017, a $ 7.8 million casualty loss and $5.2 million in incremental tenant reinsurance losses related to H urricanes Harvey and Irma, and a $9.8 million increase in foreign exchange translation losses associated with our euro denominated debt a s compared to the same period in 2016.  These amounts were partially offset by a $15. 7 million increase in self-storage net operating income (described below) .
The $ 15. 7 million increase in self-storage net operating income is a result of a $10.6 million increase in our Same Store Facilities (as defined below) and $5.1 million increase in our Non Same Store Facilities (as defined below) .  Revenues for the Same Store Facilities increased 2.4% or $13.0 million in the three months ended September 30 , 201 7 as compared to 201 6 , due primarily to higher realized annual rent per occupied square foot.  Cost of operations for the Same Store Facilities increased by 1.6% or $2.4 million in the three months ended September 30 , 201 7 as compared to 201 6 , due primarily to increased   property taxes ,   repairs and maintenance and payroll .  The increase in net operating income for the Non Same Store Facilities is due primarily to the impact of 321 self-storage facilities acquired , developed or expanded since January 201 5 .  
Operating Results for the Nine Months Ended September 30, 2017
For the nine months ended September 30 2017, net income allocable to our common shareholders was $837.5 million or $4.81 per diluted common share, compared to $831.1 million or $4.78 in 2016 representing an increase of $6.4 million or $0.03 .  The increase is due primarily to a $ 53. 1 million increase in self-storage net operating income and a $15.6 million increase in equity in earnings of real estate entities, offset partially by a $38.5 million increase in foreign exchange translation losses associated with our euro denominated debt ,  a s well as   a   $ 7.8 million casualty loss and $5.2 million in incremental tenant reinsurance losses related to H urricanes Harvey and Irma .
The $ 53. 1 million increase in self-storage net operating income is a result of a $35.9 million increase in our Same Store Facilities and $17.2 million increase in our Non Same Store Facilities .   Revenues for the Same Store Facilities increased 3.2% or $51.4 million in the nine months ended September 30, 2017 as compared to 2016, due primarily to higher realized annual rent per occupied square foot.  Cost of operations for the Same Store Facilities increased by 3.6% or $15.5 million in the nine months ended September 30, 2017 as compared to 2016, due primarily to increased property taxes, repairs and maintenance and advertising and selling costs.  The increase in net operating income for the Non Same Store Facilities is due primarily to the impact of 321 self-storage facilities acquired, developed or expanded since January 2015.
Funds from Operations
For the three months ended September 30 , 201 7 , funds from operations (“FFO”) was $2.35 per diluted common share, as compared to $2.51 in 201 6 , representing a decrease of   6.4% .  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.

1

 
 
For the nine months ended September 30, 2017 ,   FFO was $7.00 per diluted common share, as compared to $6.94 in 201 6 , representing an increase of   0.9% . 
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 )   reversals of accruals with respect to share based awards forfeited by executive office r s 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):
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﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
﻿	 	 	 	 	 	 	 	Percentage	 	 	 	 	 	 	 	Percentage	
﻿	 	2017	 	2016	 	Change	 	2017	 	2016	 	Change	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
FFO per share	$	2.35 	 	$	2.51 	 	(6.4)%	 	$	7.00 	 	$	6.94 	 	0.9% 	
Eliminate the per share impact of	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
items excluded from Core FFO, including	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
our equity share from investments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Foreign currency exchange loss	 	0.08 	 	 	0.02 	 	 	 	 	0.26 	 	 	0.03 	 	 	
Application of EITF D-42	 	0.10 	 	 	 -	 	 	 	 	0.18 	 	 	0.15 	 	 	
Casualty losses and tenant claims due	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
to hurricanes	 	0.07 	 	 	 -	 	 	 	 	0.07 	 	 	 -	 	 	
Reversals of accruals on forfeited executive	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
share-based awards	 	 -	 	 	 -	 	 	 	 	(0.03)	 	 	 -	 	 	
Other items	 	0.01 	 	 	 -	 	 	 	 	 -	 	 	0.02 	 	 	
Core FFO per share	$	2.61 	 	$	2.53 	 	3.2% 	 	$	7.48 	 	$	7.14 	 	4.8% 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿

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, 201 5 .  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 portfoli o in 201 5 , 201 6 and 201 7 .  The Same Store pool decreased from 2, 055 facilities at June  3 0 , 2017 to 2, 0 42 facilities at September   3 0 , 2017 as a result of disruptions caused by H urricanes Harvey and Irma .     We believe the Same Store information is used by investors and analysts in a similar manner.  The following table summarizes the historical operating results of these 2,0 42 facilities ( 130.3 million net rentable square feet) that represent approximately 8 3 % of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at September 30 , 201 7 . 
﻿
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Selected Operating Data for the Same	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Store Facilities (2,042 facilities)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(unaudited):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	Three Months Ended September 30,	 	Nine Months Ended September 30,	
﻿	 	 	 	 	 	 	Percentage	 	 	 	 	 	 	 	Percentage	
﻿	2017	 	2016	 	Change	 	2017	 	2016	 	Change	
﻿	(Dollar amounts in thousands, except for per square foot amounts)	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Rental income	$	539,165 	 	$	525,719 	 	2.6% 	 	$	1,571,769 	 	$	1,520,048 	 	3.4% 	
Late charges and administrative fees	 	25,229 	 	 	25,699 	 	(1.8)%	 	 	72,874 	 	 	73,161 	 	(0.4)%	
Total revenues (a)	 	564,394 	 	 	551,418 	 	2.4% 	 	 	1,644,643 	 	 	1,593,209 	 	3.2% 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of operations:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property taxes	 	55,874 	 	 	53,479 	 	4.5% 	 	 	167,963 	 	 	160,799 	 	4.5% 	
On-site property manager payroll	 	28,285 	 	 	27,784 	 	1.8% 	 	 	82,828 	 	 	83,022 	 	(0.2)%	
Supervisory payroll	 	9,586 	 	 	9,449 	 	1.4% 	 	 	29,499 	 	 	28,386 	 	3.9% 	
Repairs and maintenance	 	11,380 	 	 	11,042 	 	3.1% 	 	 	32,111 	 	 	29,683 	 	8.2% 	
Snow removal	 	 -	 	 	 -	 	0.0% 	 	 	2,249 	 	 	3,369 	 	(33.2)%	
Utilities	 	10,611 	 	 	10,931 	 	(2.9)%	 	 	29,973 	 	 	30,266 	 	(1.0)%	
Advertising and selling expense	 	6,901 	 	 	7,693 	 	(10.3)%	 	 	21,694 	 	 	18,558 	 	16.9% 	
Other direct property costs	 	14,296 	 	 	13,917 	 	2.7% 	 	 	43,418 	 	 	41,698 	 	4.1% 	
Allocated overhead	 	10,565 	 	 	10,850 	 	(2.6)%	 	 	32,136 	 	 	30,589 	 	5.1% 	
Total cost of operations (a)	 	147,498 	 	 	145,145 	 	1.6% 	 	 	441,871 	 	 	426,370 	 	3.6% 	
Net operating income (b)	$	416,896 	 	$	406,273 	 	2.6% 	 	$	1,202,772 	 	$	1,166,839 	 	3.1% 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross margin	 	73.9% 	 	 	73.7% 	 	0.3% 	 	 	73.1% 	 	 	73.2% 	 	(0.1)%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average for the period:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Square foot occupancy	 	94.5% 	 	 	95.3% 	 	(0.8)%	 	 	94.1% 	 	 	94.8% 	 	(0.7)%	
Realized annual rental income per (c):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Occupied square foot	$	17.52 	 	$	16.95 	 	3.4% 	 	$	17.12 	 	$	16.43 	 	4.2% 	
Available square foot (“REVPAF”)	$	16.56 	 	$	16.14 	 	2.6% 	 	$	16.09 	 	$	15.56 	 	3.4% 	
At September 30:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Square foot occupancy	 	 	 	 	 	 	 	 	 	93.2% 	 	 	94.2% 	 	(1.1)%	
Annual contract rent per occupied	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
square foot (d)	 	 	 	 	 	 	 	 	$	18.07 	 	$	17.59 	 	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.	

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	(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)		Annual contract rent represents the agreed upon monthly rate that is paid by our tenants in place at the time of measurement.  Contract rates are initially set in the lease agreement upon move-in, and we adjust them from time to time with notice.  Contract rent excludes other fees that are charged on a per-item basis, such as late charges and administrative fees, does not reflect the impact of promotional discounts and does not reflect the impact of rents that are written off as uncollectible.	
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:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2017	$	533,706 	 	$	546,543 	 	$	564,394 	 	 	 	 	 	 	
2016	$	512,971 	 	$	528,820 	 	$	551,418 	 	$	540,147 	 	$	2,133,356 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total cost of operations:	 	 	 	 	 	 	 	 	 	 	 	 	
2017	$	148,032 	 	$	146,341 	 	$	147,498 	 	 	 	 	 	 	
2016	$	142,437 	 	$	138,788 	 	$	145,145 	 	$	114,154 	 	$	540,524 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property taxes:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2017	$	55,889 	 	$	56,200 	 	$	55,874 	 	 	 	 	 	 	
2016	$	53,555 	 	$	53,765 	 	$	53,479 	 	$	31,113 	 	$	191,912 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Repairs and maintenance, including	 	 	 	 	 	 	 	 	 	 	 	 	
snow removal expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2017	$	11,639 	 	$	11,341 	 	$	11,380 	 	 	 	 	 	 	
2016	$	11,420 	 	$	10,590 	 	$	11,042 	 	$	11,126 	 	$	44,178 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Advertising and selling expense:	 	 	 	 	 	 	 	 	 	 	 	 	
2017	$	6,741 	 	$	8,052 	 	$	6,901 	 	 	 	 	 	 	
2016	$	5,187 	 	$	5,678 	 	$	7,693 	 	$	7,266 	 	$	25,824 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
REVPAF:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2017	$	15.65 	 	$	16.05 	 	$	16.56 	 	 	 	 	 	 	
2016	$	15.01 	 	$	15.52 	 	$	16.14 	 	$	15.83 	 	$	15.63 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average realized annual	 	 	 	
rent per occupied square foot:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2017	$	16.83 	 	$	17.00 	 	$	17.52 	 	 	 	 	 	 	
2016	$	16.04 	 	$	16.29 	 	$	16.95 	 	$	16.89 	 	$	16.54 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average occupancy levels	 	 	 	 	 	 	 	 	
for the period:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2017	 	93.1% 	 	 	94.6% 	 	 	94.5% 	 	 	 	 	 	 	
2016	 	93.6% 	 	 	95.4% 	 	 	95.3% 	 	 	93.8% 	 	 	94.5% 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

4

 
 
Property Operations — Non Same Store Facilities
The Non Same Store Facilities at Septem b er  3 0 , 201 7 represent 321 facilities that were not stabilized with respect to occupancies or rental rates since January 1, 201 5 or that we did not own as of January 1, 201 5 .  The following table summarizes operating data with respect to the Non Same Store Facilities (unaudited):
﻿
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NON SAME STORE	Three Months Ended September 30,	 	Nine Months Ended September 30,	
FACILITIES	2017	 	2016	 	Change	 	2017	 	2016	 	Change	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	(Dollar amounts in thousands, except for per square foot amounts)	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2017 acquisitions	$	1,735 	 	$	 -	 	$	1,735 	 	$	2,873 	 	$	 -	 	$	2,873 	
2016 acquisitions	 	9,297 	 	 	5,292 	 	 	4,005 	 	 	26,909 	 	 	10,395 	 	 	16,514 	
2015 acquisitions	 	4,281 	 	 	4,076 	 	 	205 	 	 	12,567 	 	 	11,448 	 	 	1,119 	
Developed facilities	 	11,615 	 	 	6,579 	 	 	5,036 	 	 	29,521 	 	 	16,030 	 	 	13,491 	
Other facilities	 	54,916 	 	 	55,792 	 	 	(876)	 	 	161,702 	 	 	161,048 	 	 	654 	
    Total revenues	 	81,844 	 	 	71,739 	 	 	10,105 	 	 	233,572 	 	 	198,921 	 	 	34,651 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of operations before depreciation	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
and amortization expense:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2017 acquisitions	 	633 	 	 	 -	 	 	633 	 	 	1,013 	 	 	 -	 	 	1,013 	
2016 acquisitions	 	3,364 	 	 	1,937 	 	 	1,427 	 	 	10,348 	 	 	3,662 	 	 	6,686 	
2015 acquisitions	 	1,401 	 	 	1,362 	 	 	39 	 	 	4,110 	 	 	3,929 	 	 	181 	
Developed facilities	 	5,466 	 	 	2,989 	 	 	2,477 	 	 	14,460 	 	 	7,422 	 	 	7,038 	
Other facilities	 	14,953 	 	 	14,472 	 	 	481 	 	 	44,686 	 	 	42,072 	 	 	2,614 	
    Total cost of operations	 	25,817 	 	 	20,760 	 	 	5,057 	 	 	74,617 	 	 	57,085 	 	 	17,532 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net operating income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2017 acquisitions	 	1,102 	 	 	 -	 	 	1,102 	 	 	1,860 	 	 	 -	 	 	1,860 	
2016 acquisitions	 	5,933 	 	 	3,355 	 	 	2,578 	 	 	16,561 	 	 	6,733 	 	 	9,828 	
2015 acquisitions	 	2,880 	 	 	2,714 	 	 	166 	 	 	8,457 	 	 	7,519 	 	 	938 	
Developed facilities	 	6,149 	 	 	3,590 	 	 	2,559 	 	 	15,061 	 	 	8,608 	 	 	6,453 	
Other facilities	 	39,963 	 	 	41,320 	 	 	(1,357)	 	 	117,016 	 	 	118,976 	 	 	(1,960)	
﻿	 	 	 	 	 	 	 	
    Net operating income (a)	$	56,027 	 	$	50,979 	 	$	5,048 	 	$	158,955 	 	$	141,836 	 	$	17,119 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At September 30:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Square foot occupancy:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2017 acquisitions	 	 	 	 	 	 	 	 	 	 	89.5% 	 	 	 -	 	 	 -	
2016 acquisitions (b)	 	 	 	 	 	 	 	 	 	 	89.1% 	 	 	91.3% 	 	 	(2.4)%	
2015 acquisitions	 	 	 	 	 	 	 	 	 	 	93.9% 	 	 	91.2% 	 	 	3.0% 	
Developed facilities	 	 	 	 	 	 	 	 	 	 	64.7% 	 	 	66.6% 	 	 	(2.9)%	
Other facilities	 	 	 	 	 	 	 	 	 	 	85.0% 	 	 	91.5% 	 	 	(7.1)%	
﻿	 	 	 	 	 	 	 	 	 	 	81.8% 	 	 	87.6% 	 	 	(6.6)%	
Annual contract rent per occupied square foot:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2017 acquisitions	 	 	 	 	 	 	 	 	 	$	10.15 	 	$	 -	 	 	 -	
2016 acquisitions (b)	 	 	 	 	 	 	 	 	 	 	10.10 	 	 	10.96 	 	 	(7.8)%	
2015 acquisitions	 	 	 	 	 	 	 	 	 	 	14.06 	 	 	13.85 	 	 	1.5% 	
Developed facilities	 	 	 	 	 	 	 	 	 	 	13.44 	 	 	13.90 	 	 	(3.3)%	
Other facilities	 	 	 	 	 	 	 	 	 	 	17.28 	 	 	16.98 	 	 	1.8% 	
﻿	 	 	 	 	 	 	 	 	 	$	14.97 	 	$	15.71 	 	 	(4.7)%	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	(a)		See attached reconciliation of self-storage NOI to operating income.	
	(b)		Contract rents per foot and occupancies at September 30, 2016, representing amounts for the properties we acquired in the first nine months of 2016, are higher than the amounts at September 30, 2017, representing amounts for the properties that we acquired throughout 2016, due primarily to the mix of properties at each date.	

5

 

﻿
﻿
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NON SAME STORE	 	 	Nine Months Ended September 30,	
FACILITIES (Continued)	 	 	 	 	 	 	2017	 	2016	 	Change	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At September 30:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Number of facilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2017 acquisitions	 	 	 	 	 	 	 	 	 	 	14 	 	 	 -	 	 	14 	
2016 acquisitions	 	 	 	 	 	 	 	 	 	 	55 	 	 	32 	 	 	23 	
2015 acquisitions	 	 	 	 	 	 	 	 	 	 	17 	 	 	17 	 	 	 -	
Developed facilities	 	 	 	 	 	 	 	 	 	 	48 	 	 	30 	 	 	18 	
Other facilities	 	 	 	 	 	 	 	 	 	 	187 	 	 	187 	 	 	 -	
﻿	 	 	 	 	 	 	 	 	 	 	321 	 	 	266 	 	 	55 	
Net rentable square feet (in thousands):	 	 	 	 	 	 	
2017 acquisitions	 	 	 	 	 	 	 	 	 	 	830 	 	 	 -	 	 	830 	
2016 acquisitions	 	 	 	 	 	 	 	 	 	 	4,121 	 	 	2,329 	 	 	1,792 	
2015 acquisitions	 	 	 	 	 	 	 	 	 	 	1,285 	 	 	1,285 	 	 	 -	
Developed facilities	 	 	 	 	 	 	 	 	 	 	5,642 	 	 	3,225 	 	 	2,417 	
Other facilities	 	 	 	 	 	 	 	 	 	 	14,585 	 	 	14,020 	 	 	565 	
﻿	 	 	 	 	 	 	 	 	 	 	26,463 	 	 	20,859 	 	 	5,604 	
﻿
Hurricanes Harvey and Irma Update
In August and September, due to Hurricanes Harvey and Irma, 115 properties in Houston and 125 properties in Florida were temporarily closed.  We removed 13 properties from our Same Store pool that had significant disruptions in ongoing rental operations from the hurricanes.  We recorded an aggregate $7.8 million casualty loss due to damaged buildings and equipment combined with expenses for repairs, cleanup, and disposal.  We expect to incur approximately $10.0 million of capital expenditures to complete the repair of hurricane damage.  Current loss estimates (including business interruption) are less than our insurance deductibles, as a result, we do not expect to receive any insurance proceeds.  We also recorded $5.2 million in incremental ancillary cost of operations, representing estimated claims cost resulting from the hurricanes with respect to tenants covered under our tenant reinsurance program.  The casualty loss and incremental ancillary cost of operations are excluded from our Core FFO per share . 
Investing and Capital Markets   Activities
During the three months ended September 30, 2017, we acquired seven self-storage facilities (two each in Florida and South Carolina and one each in Kentucky, North Carolina and Ohio) with 0.4 million net rentable square feet for $47.3 million.  During the nine months ended September 30, 2017, we acquired 14 self-storage facilities (three in Ohio, two each in Florida, Indiana, North Carolina and South Carolina and one each in Kentucky, Minnesota and New York) with 0.8 million net rentable square feet for $81.7 million.  Subsequent to September 30, 2017, we acquired or were under contract to acquire eight self-storage facilities (six in Texas and one each in Alabama and Kentucky) with 0.5 million net rentable square feet for $67.8 million .
During the three months ended September 30, 2017, we completed nine newly developed facilities and various expansion projects (1.4 million net rentable square feet) costing $144.5 million.  For the nine months ended September 30, 2017, we completed 12 newly developed facilities and various expansion projects (2.1 million net rentable square feet) costing $255.3 million.  At September 30, 2017, we had various facilities in development (2.8 million net rentable square feet) estimated to cost $365 million and various expansion projects (1.9 million net rentable square feet) estimated to cost $235 million.  The remaining $378 million of development costs for these projects is expected to be incurred primarily in the next 18 months .
On August 4 , 2017, we called our 5. 75 % Series T Preferred Shares for redemption.  The shares were redeemed on September  2 8 , 2017   for $46 2 .5 million .
On August 9 , 2017, we issued our 5. 05 % Series G Preferred Shares for gross proceeds of $ 300 million.
On September 18, 2017, we completed a public offering of $1.0 billion in aggregate principal amount of senior notes in two equal tranches; one tranche bearing interest at an annual rate of 2.370% maturing on September 15, 2022, and a second tranche bearing interest at an annual rate of 3.094% maturing on September 15, 2027.

6

 

Distributions Declared
On October 25 , 201 7 , 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 December   28 , 201 7 to shareholders of record as of December   1 3 ,   201 7 .
Third   Quarter Conference Call
A conference call is scheduled for October 26 , 2017 at 1 0 :00 a.m. (P D T) to discuss the third 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 94094559 ). A simultaneous audio webcast may be accessed by using the link at P ublic S torage.com under “Company Info, Investor Relations, News and Events, Events Calendar.”  A replay of the conference call may be accessed through November 9 , 2017 by calling (800) 585-8367 (domestic) or (404) 537-3406 (international) or by using the link at P ublic S torage.com under “Company Info, Investor Relations, News and Events, Events Calendar.” All forms of replay utilize conference ID number 94094559 .
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 September 30 , 201 7 , we had interests in 2, 374 self-storage facilities located in 38 states with approximately 15 7 million net rentable square feet in the United States and 2 20 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 wholly ‑ owned approximately 28 million rentable square feet of commercial space and had an interest in 395 apartments at September 30, 2017 .
Additional information about Public Storage is available on our website, 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 February 2 8 , 201 7 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 performance .
﻿

7

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

﻿
﻿
﻿
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	 	Three Months Ended	 	Nine Months Ended	
﻿	 	September 30,	 	September 30,	
﻿	 	2017	 	2016	 	2017	 	2016	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	
Self-storage facilities	 	$	646,238 	 	$	623,157 	 	$	1,878,215 	 	$	1,792,130 	
Ancillary operations	 	 	40,123 	 	 	39,991 	 	 	118,005 	 	 	116,992 	
﻿	 	 	686,361 	 	 	663,148 	 	 	1,996,220 	 	 	1,909,122 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	
Self-storage cost of operations	 	 	173,315 	 	 	165,905 	 	 	516,488 	 	 	483,455 	
Ancillary cost of operations	 	 	17,304 	 	 	12,722 	 	 	39,611 	 	 	40,462 	
Depreciation and amortization	 	 	113,320 	 	 	109,432 	 	 	334,426 	 	 	321,573 	
General and administrative	 	 	22,311 	 	 	22,140 	 	 	62,331 	 	 	63,508 	
﻿	 	 	326,250 	 	 	310,199 	 	 	952,856 	 	 	908,998 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	 	 	360,111 	 	 	352,949 	 	 	1,043,364 	 	 	1,000,124 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
Other income (expense):	 	 	 	 	 	 	 	 	 	 	 	 	
Interest and other income	 	 	4,569 	 	 	3,750 	 	 	12,722 	 	 	11,614 	
Interest expense	 	 	(2,389)	 	 	(1,221)	 	 	(4,553)	 	 	(3,310)	
Equity in earnings of unconsolidated real estate entities	17,218 	 	 	17,237 	 	 	57,235 	 	 	41,628 	
Gain on real estate investment sales	 	 	 -	 	 	 -	 	 	975 	 	 	689 	
Foreign currency exchange loss	 	 	(13,446)	 	 	(3,665)	 	 	(44,452)	 	 	(5,987)	
Casualty loss	 	 	(7,789)	 	 	 -	 	 	(7,789)	 	 	 -	
Net income	 	 	358,274 	 	 	369,050 	 	 	1,057,502 	 	 	1,044,758 	
Allocation to noncontrolling interests	 	 	(1,600)	 	 	(1,745)	 	 	(4,684)	 	 	(4,921)	
Net income allocable to Public Storage shareholders	 	 	356,674 	 	 	367,305 	 	 	1,052,818 	 	 	1,039,837 	
Allocation of net income to:	 	 	 	 	 	 	 	 	 	 	 	 	
Preferred shareholders – distributions	 	 	(61,055)	 	 	(57,178)	 	 	(182,457)	 	 	(178,666)	
Preferred shareholders – redemptions	 	 	(14,692)	 	 	 -	 	 	(29,330)	 	 	(26,873)	
Restricted share units 	 	 	(1,210)	 	 	(1,170)	 	 	(3,502)	 	 	(3,231)	
Net income allocable to common shareholders	 	$	279,717 	 	$	308,957 	 	$	837,529 	 	$	831,067 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
Per common share:	 	 	 	 	 	 	 	 	 	 	 	 	
Net income per common share – Basic	 	$	1.61 	 	$	1.78 	 	$	4.83 	 	$	4.80 	
Net income per common share – Diluted	 	$	1.61 	 	$	1.78 	 	$	4.81 	 	$	4.78 	
Weighted average common shares – Basic	 	 	173,715 	 	 	173,108 	 	 	173,560 	 	 	173,057 	
Weighted average common shares – Diluted	 	 	174,240 	 	 	173,848 	 	 	174,128 	 	 	173,899 	
﻿
﻿

8

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

 
﻿
﻿	 	 	 	 	 	 	
﻿	 	September 30, 2017	 	December 31, 2016	
ASSETS	 	(Unaudited)	 	 	 	
﻿	 	 	 	 	 	 	
Cash and cash equivalents	 	$	694,233 	 	$	183,688 	
﻿	 	 	 	 	 	 	
Operating real estate facilities:	 	 	 	 	 	 	
Land and buildings, at cost	 	 	14,369,903 	 	 	13,963,229 	
Accumulated depreciation	 	 	(5,585,825)	 	 	(5,270,963)	
﻿	 	 	8,784,078 	 	 	8,692,266 	
Construction in process	 	 	221,970 	 	 	230,310 	
Investments in unconsolidated real estate entities	 	 	726,168 	 	 	689,207 	
Goodwill and other intangible assets, net	 	 	205,868 	 	 	212,719 	
Other assets	 	 	133,377 	 	 	122,148 	
Total assets	 	$	10,765,694 	 	$	10,130,338 	
﻿	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	
LIABILITIES AND EQUITY	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	
Senior unsecured notes	 	$	1,396,201 	 	$	359,810 	
Mortgage notes	 	 	29,653 	 	 	30,939 	
Accrued and other liabilities	 	 	380,420 	 	 	297,935 	
Total liabilities	 	 	1,806,274 	 	 	688,684 	
﻿	 	 	 	 	 	 	
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,	 	 	 	 	 	 	
(174,700 at December 31, 2016) at liquidation preference	 	 	4,025,000 	 	 	4,367,500 	
Common Shares, $0.10 par value, 650,000,000 shares authorized,	 	 	 	 	 	 	
173,738,808 shares issued and outstanding, (173,288,787 shares	 	 	 	 	 	 	
at December 31, 2016)	 	 	17,374 	 	 	17,329 	
Paid-in capital	 	 	5,631,049 	 	 	5,609,768 	
Accumulated deficit	 	 	(662,360)	 	 	(487,581)	
Accumulated other comprehensive loss	 	 	(74,873)	 	 	(95,106)	
Total Public Storage shareholders’ equity	 	 	8,936,190 	 	 	9,411,910 	
Noncontrolling interests	 	 	23,230 	 	 	29,744 	
Total equity	 	 	8,959,420 	 	 	9,441,654 	
Total liabilities and equity	 	$	10,765,694 	 	$	10,130,338 	
﻿

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	 	Nine Months Ended	
﻿	 	September 30,	 	September 30,	
﻿	 	2017	 	2016	 	2017	 	2016	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
Computation of FFO per Share:	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
Net income allocable to common shareholders	 	$	279,717 	 	$	308,957 	 	$	837,529 	 	$	831,067 	
Eliminate items excluded from FFO:	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	113,320 	 	 	109,432 	 	 	334,426 	 	 	321,573 	
Depreciation from unconsolidated real estate investments	18,054 	 	 	18,328 	 	 	52,635 	 	 	57,319 	
Depreciation allocated to noncontrolling interests	 	 	 	 	 	 	 	 	 	 	 	 	
and restricted share unitholders	 	 	(858)	 	 	(884)	 	 	(2,657)	 	 	(2,642)	
Gains on sale of real estate investments, including	 	 	 	 	 	 	 	 	 	 	 	 	
our equity share from investments	 	 	 -	 	 	(78)	 	 	(3,077)	 	 	(767)	
FFO allocable to common shares (a)	 	$	410,233 	 	$	435,755 	 	$	1,218,856 	 	$	1,206,550 	
Diluted weighted average common shares	 	 	174,240 	 	 	173,848 	 	 	174,128 	 	 	173,899 	
FFO per share (a)	 	$	2.35 	 	$	2.51 	 	$	7.00 	 	$	6.94 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
Reconciliation of Earnings per Share to FFO per Share:	 	 	 	 	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings per share—Diluted	 	$	1.61 	 	$	1.78 	 	$	4.81 	 	$	4.78 	
Eliminate per share amounts excluded from FFO:	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization allocable to	 	 	 	 	 	 	 	 	 	 	 	 	
common shareholders	 	 	0.75 	 	 	0.73 	 	 	2.21 	 	 	2.16 	
Gains on sale of real estate investments, including	 	 	 	 	 	 	 	 	 	 	 	 	
our equity share from investments and other	 	 	(0.01)	 	 	 -	 	 	(0.02)	 	 	 -	
FFO per share (a)	 	$	2.35 	 	$	2.51 	 	$	7.00 	 	$	6.94 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
Computation of Funds Available for Distribution ("FAD"):	 	 	 	 	 	 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
FFO allocable to common shares	 	$	410,233 	 	$	435,755 	 	$	1,218,856 	 	$	1,206,550 	
Eliminate effect of items included in FFO but not FAD:	 	 	 	 	 	 	 	 	 	 	 	 	
Share-based compensation expense in excess of cash paid	12,297 	 	 	11,076 	 	 	13,096 	 	 	13,241 	
Foreign currency exchange loss, including	 	 	 	 	 	 	 	 	 	 	 	 	
our equity share from investments	 	 	13,446 	 	 	3,665 	 	 	44,452 	 	 	5,046 	
Application of EITF D-42, including our equity	 	 	 	 	 	 	 	 	 	 	 	 	
share from investments	 	 	17,552 	 	 	 -	 	 	32,190 	 	 	26,873 	
Less: Capital expenditures to maintain real estate facilities	(28,985)	 	 	(22,834)	 	 	(82,525)	 	 	(67,779)	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
FAD (a)	 	$	424,543 	 	$	427,662 	 	$	1,226,069 	 	$	1,183,931 	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
Distributions paid to common shareholders and restricted	 	 	 	 	 	 	 	 	 	 	 	 	
share units	 	$	348,555 	 	$	312,540 	 	$	1,045,140 	 	$	920,097 	
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Distribution payout ratio	 	 	82.1% 	 	 	73.1% 	 	 	85.2% 	 	 	77.7% 	
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Distributions per common share	 	$	2.00 	 	$	1.80 	 	$	6.00 	 	$	5.30 	
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	(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 .	

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PUBLIC STORAGE
SELECTED FINANCIAL DATA
 
Reconciliation of Self-Storage Net Operating Income to
Operating Income
(Unaudited – amounts in thousands)
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﻿	 	 	 	 	 	 	 	 	 	 	 	 	
﻿	 	Three Months Ended	 	Nine Months Ended	
﻿	 	September 30,	 	September 30,	
﻿	 	2017	 	2016	 	2017	 	2016	
﻿	 	 	 	 	 	 	 	 	 	 	 	 	
Self-storage revenues for:	 	 	 	 	 	 	 	 	 	 	 	 	
Same Store Facilities	 	$	564,394 	 	$	551,418 	 	$	1,644,643 	 	$	1,593,209 	
Non Same Store Facilities	 	 	81,844 	 	 	71,739 	 	 	233,572 	 	 	198,921 	
Self-storage revenues	 	 	646,238 	 	 	623,157 	 	 	1,878,215 	 	 	1,792,130 	
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Self-storage cost of operations for:	 	 	 	 	 	 	 	 	 	 	 	 	
Same Store Facilities	 	 	147,498 	 	 	145,145 	 	 	441,871 	 	 	426,370 	
Non Same Store Facilities	 	 	25,817 	 	 	20,760 	 	 	74,617 	 	 	57,085 	
Self-storage cost of operations	 	 	173,315 	 	 	165,905 	 	 	516,488 	 	 	483,455 	
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Self-storage net operating income for:	 	 	 	 	 	 	 	 	 	 	 	 	
Same Store Facilities	 	 	416,896 	 	 	406,273 	 	 	1,202,772 	 	 	1,166,839 	
Non Same Store Facilities	 	 	56,027 	 	 	50,979 	 	 	158,955 	 	 	141,836 	
Self-storage net operating income (a)	 	 	472,923 	 	 	457,252 	 	 	1,361,727 	 	 	1,308,675 	
Ancillary operating revenues	 	 	40,123 	 	 	39,991 	 	 	118,005 	 	 	116,992 	
Ancillary cost of operations	 	 	(17,304)	 	 	(12,722)	 	 	(39,611)	 	 	(40,462)	
Depreciation and amortization	 	 	(113,320)	 	 	(109,432)	 	 	(334,426)	 	 	(321,573)	
General and administrative expense	 	 	(22,311)	 	 	(22,140)	 	 	(62,331)	 	 	(63,508)	
Operating income on our income statement	 	$	360,111 	 	$	352,949 	 	$	1,043,364 	 	$	1,000,124 	
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	(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 .	
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