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press release

Feb. 24, 2021, 4:04 p.m. EST

Public Storage Reports Results for the Fourth Quarter and Year Ended December 31, 2020

Public Storage /zigman2/quotes/202279720/composite PSA +0.64% announced today operating results for the fourth quarter and year ended December 31, 2020.

Comment from the CEO

“At Public Storage, our focus on the health and safety of employees and customers, enhancing the industry’s leading platform and brand, and utilizing unparalleled capital access to fund growth drove our success in 2020,” said Joe Russell, President and Chief Executive Officer. “The outlook is favorable as we enter 2021. Public Storage is transforming the customer experience through innovation amidst strong consumer demand while executing on a robust external growth environment through property acquisitions, development, and redevelopment.”

Operating Results for the Three Months Ended December 31, 2020

For the three months ended December 31, 2020, net income allocable to our common shareholders was $292.2 million or $1.67 per diluted common share, compared to $327.3 million or $1.87 per diluted common share in 2019 representing a decrease of $35.1 million or $0.20 per diluted common share. The decrease is due primarily to (i) a $35.4 million decrease due to the impact of foreign currency exchange losses associated with our Euro denominated debt and (ii) a $12.3 million increase in general and administrative expense, partially offset by (iii) a $16.5 million increase in self-storage net operating income (described below).

The $16.5 million increase in self-storage net operating income is a result of a $6.3 million increase in our Same Store Facilities (as defined below) and a $10.2 million increase in our non-Same Store Facilities (as defined below). Revenues for the Same Store Facilities increased 0.8% or $4.7 million in the three months ended December 31, 2020 as compared to 2019, due primarily to improved occupancy. Cost of operations for the Same Store Facilities decreased by 1.1% or $1.6 million in the three months ended December 31, 2020 as compared to 2019, due primarily to a 9.3% ($2.6 million) decrease in on-site property manager payroll. The increase in net operating income of $10.2 million for the non-Same Store Facilities is due primarily to the impact of facilities acquired in 2019 and 2020 and the fill-up of recently developed and expanded facilities.

Operating Results for the Year Ended December 31, 2020

In 2020, net income allocable to our common shareholders was $1,098.3 million or $6.29 per diluted common share, compared to $1,272.8 million or $7.29 per diluted common share in 2019 representing a decrease of $174.4 million or $1.00 per diluted common share. The decrease is due primarily to (i) a $105.8 million decrease due to the impact of foreign currency exchange gains and losses associated with our Euro denominated debt, (ii) a $40.3 million increase in depreciation and amortization expense, (iii) a $21.1 million increase in general and administrative expense, (iv) a $15.6 million decrease due to the impact of allocations to preferred shareholders with respect to redemption of preferred shares, and (v) a $8.0 million decrease in self-storage net operating income (described below).

The $8.0 million decrease in self-storage net operating income is a result of a $41.7 million decrease in our Same Store Facilities, offset partially by a $33.7 million increase in our non-Same Store Facilities. Revenues for the Same Store Facilities decreased 1.0% or $23.7 million in 2020 as compared to 2019, due primarily to reduced late charges and administrative fees. Cost of operations for the Same Store Facilities increased by 2.7% or $18.1 million in 2020 as compared to 2019, due primarily to a 22.5% ($11.0 million) increase in marketing expenses, a 3.1% ($7.4 million) increase in property tax expense, and a 2.5% ($3.1 million) increase in on-site property manager payroll expense. The increase in net operating income of $33.7 million for the non-Same Store Facilities is due primarily to the impact of facilities acquired in 2019 and 2020 and the fill-up of recently developed and expanded facilities.

Funds from Operations

For the three months ended December 31, 2020, funds from operations (“FFO”) was $2.57 per diluted common share, as compared to $2.72 in 2019, representing a decrease of 5.5%. 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, 2020, FFO was $9.75 per diluted common share, as compared to $10.58 in 2019, representing a decrease of 7.8%.

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, and (iii) certain other significant non-cash and/or nonrecurring income or expense items such as loss contingency accruals, casualties, due diligence, and advisory costs. 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,
                Percentage               Percentage
    2020   2019   Change   2020   2019     Change
                                 
FFO per share $ 2.57   $ 2.72   (5.5 )%   $ 9.75   $ 10.58     (7.8 )%
Eliminate the per share impact of                              
items excluded from Core FFO, including                              
our equity share from investments:                              
Foreign currency exchange loss (gain)   0.26     0.06         0.56     (0.04 )    
Application of EITF D-42   0.06     0.06         0.28     0.21      
Other items   0.04     -         0.02     -      
Core FFO per share $ 2.93   $ 2.84   3.2 %   $ 10.61   $ 10.75     (1.3 )%
                                 

Property Operations – Same Store Facilities

The Same Store Facilities consist of facilities that have been owned and operated on a stabilized level of occupancy, revenues and cost of operations since January 1, 2018. The composition of our Same Store Facilities allows us to more effectively evaluate the ongoing performance of our self-storage portfolio in 2018, 2019, and 2020 and exclude the impact of fill-up of unstabilized facilities, which can significantly affect operating trends. 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 2,221 facilities (143.7 million net rentable square feet) that represent approximately 82% of the aggregate net rentable square feet of our U.S. consolidated self-storage portfolio at December 31, 2020.

                               
Selected Operating Data for the Same                            
Store Facilities (2,221 facilities)                            
(unaudited):                              
  Three Months Ended December 31,   Year ended December 31,
              Percentage               Percentage
  2020   2019   Change   2020   2019   Change
  (Dollar amounts in thousands, except for per square foot data)
Revenues:                              
Rental income $ 600,528     $ 588,177     2.1 %   $ 2,355,576     $ 2,353,625     0.1 %
Late charges and administrative fees   18,984       26,605     (28.6 )%     80,970       106,604     (24.0 )%
Total revenues (a)   619,512       614,782     0.8 %     2,436,546       2,460,229     (1.0 )%
                               
Direct cost of operations (a):                              
Property taxes   38,778       38,969     (0.5 )%     247,860       240,451     3.1 %
On-site property manager payroll   25,750       28,395     (9.3 )%     125,051       121,978     2.5 %
Repairs and maintenance   12,371       11,667     6.0 %     46,582       47,445     (1.8 )%
Snow removal   598       881     (32.1 )%     2,639       4,058     (35.0 )%
Utilities   9,090       10,327     (12.0 )%     39,459       43,461     (9.2 )%
Marketing   13,075       13,207     (1.0 )%     59,901       48,911     22.5 %
Other direct property costs   17,107       16,149     5.9 %     66,646       65,331     2.0 %
Total direct cost of operations   116,769       119,595     (2.4 )%     588,138       571,635     2.9 %
Direct net operating income (b)   502,743       495,187     1.5 %     1,848,408       1,888,594     (2.1 )%
Indirect cost of operations (a):                              
Supervisory payroll   (8,769 )     (8,327 )   5.3 %     (39,291 )     (37,719 )   4.2 %
Centralized management costs   (12,204 )     (11,824 )   3.2 %     (47,713 )     (49,453 )   (3.5 )%
Share based compensation   (3,169 )     (2,734 )   15.9 %     (12,686 )     (10,956 )   15.8 %
Net operating income (c) $ 478,601     $ 472,302     1.3 %   $ 1,748,718     $ 1,790,466     (2.3 )%
                               
Gross margin (before indirect costs,                              
depreciation and amortization expense) 81.2 %     80.5 %   0.9 %     75.9 %     76.8 %   (1.2 )%
                               
Gross margin (before depreciation                              
and amortization expense) 77.3 %     76.8 %   0.7 %     71.8 %     72.8 %   (1.4 )%
                               
Weighted average for the period:                              
Square foot occupancy   95.2 %     93.1 %   2.3 %     94.5 %     93.4 %   1.2 %
Realized annual rental income per (d):                              
Occupied square foot $ 17.56     $ 17.60     (0.2 )%   $ 17.34     $ 17.53     (1.1 )%
Available square foot (“REVPAF”) $ 16.72     $ 16.38     2.1 %   $ 16.40     $ 16.38     0.1 %
At December 31:                              
Square foot occupancy                   94.2 %     91.7 %   2.7 %
Annual contract rent per occupied                              
square foot (e)                 $ 17.99     $ 18.06     (0.4 )%
(a) Revenues and cost of operations do not include tenant reinsurance and merchandise sales and expenses generated at the facilities.
(b) Direct net operating income is a non-GAAP financial measure that excludes the impact of supervisory payroll, centralized management costs and stock based compensation in addition to depreciation and amortization expense. We utilize direct net operating income in evaluating property performance and in evaluating property operating trends as compared to our competitors.
(c) See attached reconciliation of self-storage net operating income (“NOI”) to net income.
(d) 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.
(e) 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 data)
Total revenues:                            
2020 $ 609,053     $ 596,896     $ 611,085     $ 619,512     $ 2,436,546  
2019 $ 601,805     $ 615,564     $ 628,078     $ 614,782     $ 2,460,229  
                             
Total cost of operations:                        
2020 $ 182,842     $ 185,862     $ 178,213     $ 140,911     $ 687,828  
2019 $ 175,376     $ 173,911     $ 177,996     $ 142,480     $ 669,763  
                             
Property taxes:                            
2020 $ 70,097     $ 69,913     $ 69,072     $ 38,778     $ 247,860  
2019 $ 66,744     $ 67,466     $ 67,272     $ 38,969     $ 240,451  
                             
Repairs and maintenance, including                        
snow removal expenses:                            
2020 $ 12,381     $ 11,292     $ 12,579     $ 12,969     $ 49,221  
2019 $ 13,745     $ 12,056     $ 13,154     $ 12,548     $ 51,503  
                             
Marketing:                        
2020 $ 14,275     $ 16,979     $ 15,572     $ 13,075     $ 59,901  
2019 $ 8,981     $ 12,404     $ 14,319     $ 13,207     $ 48,911  
                             
REVPAF:                            
2020 $ 16.24     $ 16.13     $ 16.50     $ 16.72     $ 16.40  
2019 $ 16.00     $ 16.41     $ 16.72     $ 16.38     $ 16.38  
                             
Weighted average realized annual                        
rent per occupied square foot:                            
2020 $ 17.44     $ 17.11     $ 17.27     $ 17.56     $ 17.34  
2019 $ 17.31     $ 17.46     $ 17.75     $ 17.60     $ 17.53  
                             
Weighted average occupancy levels                
for the period:                            
2020   93.1 %     94.3 %     95.5 %     95.2 %     94.5 %
2019   92.5 %     94.0 %     94.2 %     93.1 %     93.4 %
                             

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,
  2020   2019   Change   2020   2019   Change
  (Amounts in thousands, except for per square foot data)
                               
Revenues:                              
Los Angeles $ 97,353   $ 95,413   2.0 %   $ 381,535   $ 379,097   0.6 %
San Francisco   52,731     50,805   3.8 %     205,558     202,747   1.4 %
New York   39,321     39,238   0.2 %     154,538     157,029   (1.6 )%
Seattle-Tacoma   28,935     28,723   0.7 %     114,606     114,774   (0.1 )%
Washington DC   28,570     28,711   (0.5 )%     112,739     114,483   (1.5 )%
Miami   27,786     27,677   0.4 %     108,598     111,402   (2.5 )%
Chicago   30,292     30,012   0.9 %     118,560     119,281   (0.6 )%
Atlanta   21,077     21,612   (2.5 )%     83,511     87,518   (4.6 )%
Dallas-Ft. Worth   20,955     21,150   (0.9 )%     83,162     84,988   (2.1 )%
Houston   17,791     18,141   (1.9 )%     70,975     73,683   (3.7 )%
Orlando-Daytona   15,306     15,701   (2.5 )%     60,772     62,869   (3.3 )%
Philadelphia   15,312     14,857   3.1 %     59,666     59,120   0.9 %
West Palm Beach   11,820     11,672   1.3 %     46,038     46,664   (1.3 )%
Tampa   11,760     11,849   (0.8 )%     46,216     47,706   (3.1 )%
Charlotte   10,486     10,393   0.9 %     41,006     41,781   (1.9 )%
All other markets   190,017     188,828   0.6 %     749,066     757,087   (1.1 )%
Total revenues $ 619,512   $ 614,782   0.8 %   $ 2,436,546   $ 2,460,229   (1.0 )%
                               
Net operating income:                              
Los Angeles $ 81,416   $ 80,378   1.3 %   $ 309,991   $ 311,049   (0.3 )%
San Francisco   43,335     41,351   4.8 %     163,962     162,667   0.8 %
New York   31,321     30,932   1.3 %     108,681     111,424   (2.5 )%
Seattle-Tacoma   23,085     23,808   (3.0 )%     86,874     89,440   (2.9 )%
Washington DC   22,759     22,456   1.3 %     82,415     84,704   (2.7 )%
Miami   24,997     24,371   2.6 %     79,472     82,910   (4.1 )%
Chicago   19,161     18,989   0.9 %     62,749     63,319   (0.9 )%
Atlanta   16,502     16,767   (1.6 )%     59,940     64,423   (7.0 )%
Dallas-Ft. Worth   17,003     16,693   1.9 %     56,020     58,192   (3.7 )%
Houston   11,296     11,178   1.1 %     43,073     45,793   (5.9 )%
Orlando-Daytona   11,853     12,115   (2.2 )%     42,568     45,282   (6.0 )%
Philadelphia   11,458     10,713   7.0 %     41,572     41,592   (0.0 )%
West Palm Beach   8,779     8,650   1.5 %     32,752     34,125   (4.0 )%
Tampa   8,984     9,039   (0.6 )%     31,290     33,421   (6.4 )%
Charlotte   7,739     7,383   4.8 %     29,509     30,104   (2.0 )%
All other markets   138,913     137,479   1.0 %     517,850     532,021   (2.7 )%
Total net operating income $ 478,601   $ 472,302   1.3 %   $ 1,748,718   $ 1,790,466   (2.3 )%
                               
Same Store Facilities Operating Trends by Market (Continued)            
           
  Three Months Ended December 31,   Year Ended December 31,
  2020   2019   Change   2020   2019   Change
Weighted average square foot                              
occupancy:                  
Los Angeles   97.7 %     95.3 %   2.5 %     96.7 %     95.2 %   1.6 %
San Francisco   97.7 %     93.7 %   4.3 %     96.1 %     94.3 %   1.9 %
New York   95.9 %     93.6 %   2.5 %     95.2 %     94.1 %   1.2 %
Seattle-Tacoma   94.4 %     92.2 %   2.4 %     94.1 %     93.0 %   1.2 %
Washington DC   95.2 %     92.5 %   2.9 %     94.4 %     93.4 %   1.1 %
Miami   96.2 %     93.1 %   3.3 %     94.4 %     93.0 %   1.5 %
Chicago   94.6 %     92.4 %   2.4 %     93.8 %     92.1 %   1.8 %
Atlanta   94.0 %     92.2 %   2.0 %     92.8 %     93.0 %   (0.2 )%
Dallas-Ft. Worth   93.2 %     91.8 %   1.5 %     92.9 %     92.1 %   0.9 %
Houston   92.9 %     91.2 %   1.9 %     92.1 %     90.1 %   2.2 %
Orlando-Daytona   94.7 %     93.4 %   1.4 %     94.4 %     94.2 %   0.2 %
Philadelphia   96.7 %     94.6 %   2.2 %     96.1 %     95.3 %   0.8 %
West Palm Beach   96.3 %     94.0 %   2.4 %     95.0 %     94.0 %   1.1 %
Tampa   94.8 %     92.3 %   2.7 %     93.4 %     92.6 %   0.9 %
Charlotte   94.5 %     91.7 %   3.1 %     93.0 %     91.9 %   1.2 %
All other markets   94.8 %     92.9 %   2.0 %     94.5 %     93.6 %   1.0 %
Total weighted average                              
square foot occupancy   95.2 %     93.1 %   2.3 %     94.5 %     93.4 %   1.2 %
                               
Realized annual rent per                              
occupied square foot:                              
Los Angeles $ 26.20     $ 26.02     0.7 %   $ 25.88     $ 25.86     0.1 %
San Francisco   26.97       26.85     0.4 %     26.64       26.62     0.1 %
New York   25.90       26.16     (1.0 )%     25.62       26.05     (1.7 )%
Seattle-Tacoma   20.56       20.65     (0.4 )%     20.33       20.42     (0.4 )%
Washington DC   21.32       21.72     (1.8 )%     21.11       21.45     (1.6 )%
Miami   19.91       20.18     (1.3 )%     19.77       20.36     (2.9 )%
Chicago   15.21       15.21     0.0 %     14.96       15.15     (1.3 )%
Atlanta   13.17       13.55     (2.8 )%     13.15       13.56     (3.0 )%
Dallas-Ft. Worth   13.46       13.60     (1.0 )%     13.36       13.63     (2.0 )%
Houston   12.71       13.00     (2.2 )%     12.75       13.39     (4.8 )%
Orlando-Daytona   13.62       13.97     (2.5 )%     13.54       13.89     (2.5 )%
Philadelphia   17.27       16.84     2.6 %     16.86       16.65     1.3 %
West Palm Beach   18.78       18.72     0.3 %     18.51       18.72     (1.1 )%
Tampa   13.78       14.04     (1.9 )%     13.70       14.10     (2.8 )%
Charlotte   11.16       11.27     (1.0 )%     11.07       11.29     (1.9 )%
All other markets   14.56       14.55     0.1 %     14.35       14.48     (0.9 )%
Total realized rent per                              
occupied square foot $ 17.56     $ 17.60     (0.2 )%   $ 17.34     $ 17.53     (1.1 )%
                               
Same Store Facilities Operating Trends by Market (Continued)            
           
  Three Months Ended December 31,     Year Ended December 31,
  2020   2019   Change   2020   2019   Change
REVPAF:                              
Los Angeles $ 25.59   $ 24.81   3.1 %   $ 25.02   $ 24.62   1.6 %
San Francisco   26.35     25.17   4.7 %     25.61     25.09   2.1 %
New York   24.85     24.50   1.4 %     24.39     24.50   (0.4 )%
Seattle-Tacoma   19.40     19.04   1.9 %     19.13     18.99   0.7 %
Washington DC   20.29     20.09   1.0 %     19.93     20.03   (0.5 )%
Miami   19.14     18.79   1.9 %     18.66     18.93   (1.4 )%
Chicago   14.39     14.05   2.4 %     14.04     13.95   0.6 %
Atlanta   12.38     12.49   (0.9 )%     12.20     12.62   (3.3 )%
Dallas-Ft. Worth   12.54     12.49   0.4 %     12.41     12.55   (1.1 )%
Houston   11.81     11.86   (0.4 )%     11.75     12.06   (2.6 )%
Orlando-Daytona   12.90     13.05   (1.1 )%     12.78     13.08   (2.3 )%
Philadelphia   16.70     15.94   4.8 %     16.20     15.86   2.1 %
West Palm Beach   18.08     17.59   2.8 %     17.59     17.59   0.0 %
Tampa   13.05     12.96   0.7 %     12.80     13.06   (2.0 )%
Charlotte   10.55     10.33   2.1 %     10.29     10.38   (0.9 )%
All other markets   13.80     13.53   2.0 %     13.57     13.55   0.1 %
Total REVPAF $ 16.72   $ 16.38   2.1 %   $ 16.40   $ 16.38   0.1 %

Property Operations – Non-Same Store Facilities

In addition to our Same Store Facilities, at December 31, 2020 we had 327 facilities that were not stabilized with respect to occupancies or rental rates since January 1, 2018 or that we did not own as of January 1, 2018. The following table summarizes operating data with respect to these 327 facilities (unaudited). Additional data and metrics with respect to these facilities is included in the MD&A in our December 31, 2020 Form 10-K.

                                   
NON-SAME STORE Three Months Ended December 31,   Year ended December 31,
FACILITIES 2020   2019   Change   2020   2019   Change
  (Dollar amounts in thousands, except for per square foot data)
Revenues:                                  
Acquired Facilities:                                  
2018 Acquisitions $ 4,450   $ 4,143   $ 307     $ 17,119   $ 16,029   $ 1,090  
2019 Acquisitions   8,599     5,861     2,738       31,334     12,704     18,630  
2020 Acquisitions   5,997     -     5,997       11,365     -     11,365  
    19,046     10,004     9,042       59,818     28,733     31,085  
                                   
Developed and expanded facilities:                                  
Developed in 2015   4,722     4,539     183       18,228     17,630     598  
Developed in 2016 - 2018   19,010     15,873     3,137       70,180     56,868     13,312  
Developed in 2019   2,106     849     1,257       6,455     1,720     4,735  
Developed in 2020   215     -     215       301     -     301  
Expansions completed before 2019   9,052     7,891     1,161       33,921     29,354     4,567  
Expansions completed in 2019 or 2020   10,030     8,022     2,008       36,031     28,898     7,133  
Expansions in process   3,792     4,081     (289 )     15,648     16,573     (925 )
    48,927     41,255     7,672       180,764     151,043     29,721  
                                   
Other non-same store facilities   11,453     10,986     467       44,502     44,547     (45 )
Total revenues   79,426     62,245     17,181       285,084     224,323     60,761  
                                   
Cost of operations before                                  
depreciation and amortization:                                  
Acquired Facilities:                                  
2018 Acquisitions   1,811     1,644     167       7,562     7,278     284  
2019 Acquisitions   3,364     2,300     1,064       13,323     5,178     8,145  
2020 Acquisitions   3,072     -     3,072       6,742     -     6,742  
    8,247     3,944     4,303       27,627     12,456     15,171  
                                   
Developed and expanded facilities:                                  
Developed in 2015   1,172     1,223     (51 )     5,720     5,842     (122 )
Developed in 2016 - 2018   6,467     5,887     580       29,728     27,694     2,034  
Developed in 2019   1,139     637     502       4,685     1,915     2,770  
Developed in 2020   173     -     173       383     -     383  
Expansions completed before 2019   2,718     2,352     366       11,492     10,462     1,030  
Expansions completed in 2019 or 2020   4,658     3,734     924       19,372     14,571     4,801  
Expansions in process   1,079     894     185       4,262     3,828     434  
    17,406     14,727     2,679       75,642     64,312     11,330  
                                   
Other non-same store facilities   3,750     3,768     (18 )     16,446     15,885     561  
Total cost of operations   29,403     22,439     6,964       119,715     92,653     27,062  
                                   
NON-SAME STORE Three Months Ended December 31,   Year ended December 31,
FACILITIES (continued) 2020   2019   Change   2020     2019     Change
                                   
Net operating income:                                  
Acquired Facilities:                                  
2018 Acquisitions $ 2,639   $ 2,499   $ 140     $ 9,557     $ 8,751     $ 806  
2019 Acquisitions   5,235     3,561     1,674       18,011       7,526       10,485  
2020 Acquisitions   2,925     -     2,925       4,623       -       4,623  
    10,799     6,060     4,739       32,191       16,277       15,914  
                                   
Developed and expanded facilities:                                  
Developed in 2015   3,550     3,316     234       12,508       11,788       720  
Developed in 2016 - 2018   12,543     9,986     2,557       40,452       29,174       11,278  
Developed in 2019   967     212     755       1,770       (195 )     1,965  
Developed in 2020   42     -     42       (82 )     -       (82 )
Expansions completed before 2019   6,334     5,539     795       22,429       18,892       3,537  
Expansions completed in 2019 or 2020   5,372     4,288     1,084       16,659       14,327       2,332  
Expansions in process   2,713     3,187     (474 )     11,386       12,745       (1,359 )
    31,521     26,528     4,993       105,122       86,731       18,391  
                                   
Other non-same store facilities   7,703     7,218     485       28,056       28,662       (606 )
Net operating income (a) $ 50,023   $ 39,806   $ 10,217     $ 165,369     $ 131,670     $ 33,699  
                                   
(a) See attached reconciliation of self-storage NOI to net income.

Investing and Capital Activities

During the three months ended December 31, 2020, we acquired 43 self-storage facilities (five each in Michigan and Pennsylvania, four each in Alabama, Illinois and Texas, three each in Georgia and Missouri, two each in Arizona, Colorado, Florida, Minnesota and Ohio and one each in Maryland, Nevada, Oklahoma, Oregon and Washington) with 3.7 million net rentable square feet for $513.7 million. During 2020, we acquired 62 self-storage facilities (six in Ohio, five each in Michigan and Pennsylvania, four each in Alabama, Illinois, Minnesota and Texas, three each in California, Colorado, Florida, Georgia and Missouri, two each in Arizona, New York and Tennessee and one each in Indiana, Massachusetts, Maryland, Nebraska, Nevada, Oklahoma, Oregon, Utah and Washington) with 5.1 million net rentable square feet for $796.1 million.

Subsequent to December 31, 2020, we acquired or were under contract to acquire 40 self-storage facilities across 18 states with 3.5 million net rentable square feet, for $580.1 million.

During the three months ended December 31, 2020, we opened one newly developed facility and various expansion projects (0.4 million net rentable square feet – 0.2 million in Missouri and 0.1 million each in Florida and Texas) costing $41.3 million. During 2020, we opened three newly developed facilities and various expansion projects (1.1 million net rentable square feet – 0.5 million in Florida, 0.2 million each in Minnesota and Missouri and 0.1 million each in California and Texas) costing $138.7 million. At December 31, 2020, we had various facilities in development (1.4 million net rentable square feet) estimated to cost $235 million and various expansion projects (2.2 million net rentable square feet) estimated to cost $326 million. Our aggregate 3.6 million net rentable square foot pipeline of development and expansion facilities includes 1.3 million in California, 1.0 million in Florida, 0.2 million each in New York, Texas, Virginia and Washington and 0.5 million in other states. The remaining $373 million of development costs for these projects is expected to be incurred primarily in the next 18 to 24 months.

On October 6, 2020, we issued our 3.875% Series N Preferred Shares for gross proceeds of $283 million.

On November 9, 2020, we issued our 3.9% Series O Preferred Shares for gross proceeds of $170 million.

On January 19, 2021, we completed a public offering of $500 million Senior Unsecured Notes bearing interest at a fixed rate of 0.875% and maturing on February 15, 2026.

On January 20, 2021, we redeemed our 5.40% Series B Preferred Shares for $300 million. We called these shares for redemption in December 2020 and classified the liquidation amount as a liability on our balance sheet at December 31, 2020.

Distributions Declared

On February 16, 2021, 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 31, 2021 to shareholders of record as of March 16, 2021.

Fourth Quarter Conference Call

A conference call is scheduled for February 25, 2021 at 9:00 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 8057778). A simultaneous audio webcast may be accessed by using the link at www.publicstorage.com under “About Us, Investor Relations, News and Events, Events Calendar.” A replay of the conference call may be accessed through March 11, 2021 by calling (800) 585-8367 (domestic), (404) 537-3406 (international) or by using the link at www.publicstorage.com under “About Us, Investor Relations, News and Events, Events Calendar.” All forms of replay utilize conference ID number 8057778.

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. At December 31, 2020, we had: (i) interests in 2,548 self-storage facilities located in 38 states with approximately 175 million net rentable square feet in the United States, (ii) an approximate 35% common equity interest in Shurgard Self Storage SA (euronext brussels:SHUR) which owned 241 self-storage facilities located in seven Western European nations with approximately 13 million net rentable square feet operated under the “Shurgard” brand and (iii) an approximate 42% common equity interest in PS Business Parks, Inc. /zigman2/quotes/207607254/composite PSB -0.72% which owned and operated approximately 28 million rentable square feet of commercial space at December 31, 2020. Our headquarters are located in Glendale, California.

This press release, our Form 10-K for the year ended December 31, 2020, a financial supplement, and additional information about Public Storage is available on our website, www.publicstorage.com .

We expect to release our 2020 Annual Report on Form 10-K within approximately one business day.

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 25, 2020 and in our other filings with the SEC including: general risks associated with the ownership and operation of real estate, including changes in demand, risk related to development, expansion and acquisition 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; risks associated with the COVID Pandemic or similar events, including but not limited to illness or death of our employees or customers, negative impacts to the economic environment and to self-storage customers which could reduce the demand for self-storage or reduce our ability to collect rent, and/or potential regulatory actions to (i) close our facilities if we were determined not to be an “essential business” or for other reasons, (ii) limit our ability to increase rent or otherwise limit the rent we can charge or (iii) limit our ability to collect rent or evict delinquent tenants; the risk that there could be an out-migration of population from certain high-cost major markets, if it is determined that the ability to “work from home,” which has become more prominent during the COVID Pandemic, could allow certain workers to live in less expensive localities, which could negatively impact the occupancies and revenues of our properties in such major high-cost markets; risk that even though many initial restrictions due to the COVID Pandemic have eased, they could be reinstituted in response to increases in infections or if additional pandemics occur; risk that we could experience a change in the move-out patterns of our long-term customers due to economic uncertainty and the significant increase in unemployment resulting from the COVID Pandemic. This could lead to lower occupancies and rent “roll down” as long-term customers are replaced with new customers at lower rates; risk of negative impacts on the cost and availability of debt and equity capital as a result of the COVID Pandemic, which could have a material impact upon our capital and growth plans; the impact of competition from new and existing self-storage and commercial facilities and other storage alternatives; the risk that our existing self-storage facilities may be at a disadvantage in competing with newly developed facilities with more visual and customer appeal; risks related to increased reliance on Google as a customer acquisition channel; difficulties in our ability to successfully evaluate, finance, integrate into our existing operations and manage properties that we acquire directly or through the acquisition of entities that own and operate self-storage facilities; 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 legal and regulatory environment, as well as national, state and local laws and regulations including, without limitation, those governing environmental issues, taxes, our tenant reinsurance business, and labor, including 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; risks due to ballot initiatives or other actions that could remove the protections of Proposition 13 with respect to our real estate and result in substantial increases in our assessed values and property tax bills in California; changes in United States 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 operations or our business, customer and employee relationships or result in fraudulent payments; 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 and cost overruns on our projects to develop new facilities or expand our existing facilities; 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 because of new information, new estimates, or other factors, events or circumstances after the date of these forward-looking statements, except when 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, neither as predictions of future events nor guarantees of future performance.

PUBLIC STORAGE
                         
    Three Months Ended   Year Ended
    December 31,   December 31,
    2020   2019   2020   2019
                         
Revenues:                        
Self-storage facilities   $ 698,938     $ 677,027     $ 2,721,630     $ 2,684,552  
Ancillary operations     49,598       42,965       193,438       170,556  
      748,536       719,992       2,915,068       2,855,108  
                         
Expenses:                        
Self-storage cost of operations     170,314       164,919       807,543       762,416  
Ancillary cost of operations     15,838       12,215       59,919       50,736  
Depreciation and amortization     141,406       134,885       553,257       512,918  
General and administrative     30,140       17,855       83,199       62,146  
Interest expense     14,235       12,647       56,283       45,641  
      371,933       342,521       1,560,201       1,433,857  
                         
Other increases (decreases) to net income:                        
Interest and other income     3,522       6,028       22,323       26,683  
Equity in earnings of unconsolidated real estate entities 17,634       13,916       80,497       69,547  
Gain on sale of real estate     376       -       1,493       341  
Foreign currency exchange (loss) gain     (45,703 )     (10,318 )     (97,953 )     7,829  
Net income     352,432       387,097       1,361,227       1,525,651  
Allocation to noncontrolling interests     (1,165 )     (1,082 )     (4,014 )     (5,117 )
Net income allocable to Public Storage shareholders     351,267       386,015       1,357,213       1,520,534  
Allocation of net income to:                        
Preferred shareholders – distributions     (48,219 )     (51,614 )     (207,068 )     (210,179 )
Preferred shareholders – redemptions     (9,883 )     (6,153 )     (48,265 )     (32,693 )
Restricted share units     (999 )     (997 )     (3,545 )     (4,895 )
Net income allocable to common shareholders   $ 292,166     $ 327,251     $ 1,098,335     $ 1,272,767  
                         
Per common share:                        
Net income per common share – Basic   $ 1.67     $ 1.88     $ 6.29     $ 7.30  
Net income per common share – Diluted   $ 1.67     $ 1.87     $ 6.29     $ 7.29  
Weighted average common shares – Basic     174,532       174,383       174,494       174,287  
Weighted average common shares – Diluted     174,749       174,590       174,642       174,530  
PUBLIC STORAGE
             
    December 31, 2020   December 31, 2019
ASSETS   (Unaudited)      
             
Cash and equivalents   $ 257,560     $ 409,743  
             
Operating real estate facilities:            
Land and buildings, at cost     17,372,627       16,289,146  
Accumulated depreciation     (7,152,135 )     (6,623,475 )
      10,220,492       9,665,671  
Construction in process     188,079       141,934  
Investments in unconsolidated real estate entities     773,046       767,816  
Goodwill and other intangible assets, net     204,654       205,936  
Other assets     172,715       174,344  
Total assets   $ 11,816,546     $ 11,365,444  
             
             
             
LIABILITIES AND EQUITY            
             
Senior unsecured notes   $ 2,519,762     $ 1,875,218