Executive Summary

Q4 2017 GAAP diluted EPS was $1.92, down 5.4% year over year; FFO per share was $2.70 (-2.5% YoY), while Core FFO per share rose to $2.75 (+3.8% YoY) as FX losses and hurricane-related items were excluded .
Same-store revenue grew 2.1% and same-store NOI rose 2.0% on higher realized rent per occupied square foot; occupancy moderated 70 bps YoY to 93.1% .
Headwinds: FX losses from euro-denominated debt (-$5.6m in Q4) and higher interest expense; tailwinds: non-same-store contributions and development pipeline progress .
Capital markets and dividends: $1.58B raised in 2017 (preferred and senior notes); common dividend declared at $2.00 for the quarter, unchanged .

What Went Well and What Went Wrong

What Went Well

Same-store revenue increased 2.1% and NOI rose 2.0% in Q4 on pricing (“higher realized annual rent per occupied square foot”) .
Core FFO per share expanded to $2.75 (+3.8% YoY), reflecting exclusion of FX effects and other non-cash/non-recurring items .
Non-same-store NOI increased by $5.2m in Q4; management noted growth “due primarily to the impact of 345 self-storage facilities acquired, developed or expanded since January 2015” .

Management quotes (press release):

“Revenues for the Same Store Facilities increased 2.1%… due primarily to higher realized annual rent per occupied square foot.”
“The increase in net operating income for the Non Same Store Facilities is due primarily to the impact of 345 self-storage facilities acquired, developed or expanded since January 2015.”
“Core FFO per share… represents FFO per share excluding… foreign currency exchange gains and losses… and certain other non-cash and/or nonrecurring items.”

What Went Wrong

GAAP EPS declined ($1.92 vs $2.03), with net income allocable to common down $18.7m YoY, primarily due to FX translation losses and higher interest expense .
Occupancy pressure: weighted average occupancy fell to 93.1% (from 93.8% YoY) in same-store facilities; gross margin down 10 bps YoY .
Hurricanes Harvey/Irma impacts earlier in 2017: $7.8m casualty loss and $5.2m incremental tenant reinsurance claims; preferred redemption allocations also weighed on Q3 GAAP results .

Financial Results

Consolidated Financials vs Prior Quarters

Metric	Q2 2017	Q3 2017	Q4 2017
Total Revenues ($USD Thousands)	$664,312	$686,361	$672,308
Net Income Allocable to Common ($USD Thousands)	$276,681	$279,717	$334,080
Diluted EPS ($)	$1.59	$1.61	$1.92
FFO per Share ($)	$2.31	$2.35	$2.70
Core FFO per Share ($)	$2.51	$2.61	$2.75

Segment Breakdown: Self-Storage Revenues and NOI

Metric	Q2 2017	Q3 2017	Q4 2017
Self-Storage Revenues - Same Store ($USD Thousands)	$550,018	$564,394	$551,730
Self-Storage Revenues - Non Same Store ($USD Thousands)	$74,181	$81,844	$82,488
Self-Storage NOI - Same Store ($USD Thousands)	$402,713	$416,896	$434,662
Self-Storage NOI - Non Same Store ($USD Thousands)	$50,291	$56,027	$58,411

Same Store KPIs

KPI	Q2 2017	Q3 2017	Q4 2017
Weighted Avg Occupancy	94.5%	94.5%	93.1%
Realized Annual Rent per Occupied Sq Ft ($)	$16.97	$17.52	$17.40
REVPAF ($)	$16.03	$16.56	$16.18
Gross Margin	73.2%	73.9%	78.8%
Total Revenues ($USD Thousands)	$550,018	$564,394	$551,730
Total Cost of Operations ($USD Thousands)	$147,305	$147,498	$117,068
NOI ($USD Thousands)	$402,713	$416,896	$434,662

Non Same Store KPIs

KPI	Q2 2017	Q3 2017	Q4 2017
Total Revenues ($USD Thousands)	$74,181	$81,844	$82,488
Cost of Operations ($USD Thousands)	$23,890	$25,817	$24,077
NOI ($USD Thousands)	$50,291	$56,027	$58,411
Period-End Occupancy	86.4%	81.8%	79.9%
Annual Contract Rent per Occupied Sq Ft ($)	$14.89	$14.97	$15.03

Non-GAAP Reconciliations and Cash Flow

Metric	Q2 2017	Q3 2017	Q4 2017
FAD ($USD Thousands)	$419,596	$424,543	$445,377
Distribution Payout Ratio (FAD basis)	83.0%	82.1%	78.3%
Distributions per Common Share ($)	$2.00	$2.00	$2.00

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Remaining development costs to be incurred ($)	Next ~18 months	~$378m (as of 9/30/2017)	~$350m (as of 12/31/2017)	Lowered (project progress)
Facilities in development (net rentable sq ft)	Current status	2.8m sq ft	2.7m sq ft	Slightly lower
Expansion projects (net rentable sq ft)	Current status	1.9m sq ft	1.9m sq ft	Maintained
Common Dividend ($/share)	Q1 2018 payable Mar 29	$2.00 (Q3 2017)	$2.00 declared Feb 20, 2018	Maintained

No explicit revenue/margin/tax-rate guidance was provided in the Q4 2017 press release .

Earnings Call Themes & Trends

Note: The Q4 2017 earnings call took place on Feb 21, 2018; a transcript is publicly available but not retrievable via document tools here. Event reference: Investors site event calendar (Feb 21, 2018 Q4 call) . Transcript reference: MarketScreener link .

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
Property taxes & OpEx	Rising property taxes; higher advertising & repairs	Same-store OpEx +2.6% YoY; payroll and repairs up; lower advertising	Persistent cost inflation, some mix shifts
Hurricanes impact	$7.8m casualty loss, $5.2m tenant reinsurance claims; temporary closures; same-store pool adjusted	Hurricane-related items impacted full-year results; excluded from Core FFO	One-off events flowing through FY17
FX (euro debt)	Larger FX losses vs prior year	Q4 FX loss of $5.6m; FY FX reduction vs 2016	Continued FX volatility headwind
Development & acquisitions	Active development/expansion and acquisitions	2017 completions (2.7m sq ft), remaining costs ~$350m; acquisitions / consolidation of 12 JV assets	Execution continuing; remaining spend down
Pricing & occupancy	Higher realized rents; occupancy modestly lower	Same-store realized rents up; occupancy lower YoY	Price-led growth with occupancy normalization

Management Commentary

Prepared remarks (press release highlights):

“The decrease [in net income] primarily reflects (i) a $29.2 million reduction due to the impact of foreign exchange translation gains and losses… and (ii) a $7.2 million increase in interest expense… offset partially by (iii) a $13.8 million increase in self-storage net operating income.”
“Revenues for the Same Store Facilities increased 2.1%… due primarily to higher realized annual rent per occupied square foot.”
“During 2017, we raised $1,580.0 million in gross proceeds… [preferred shares and senior notes].”
“At December 31, 2017, we had… facilities in development (2.7 million net rentable square feet) estimated to cost $367 million… expansion projects (1.9 million… sq ft) estimated to cost $247 million. The remaining $350 million of development costs… expected… in the next 18 months.”

Q&A Highlights

The Q4 2017 call and transcript links are available (event calendar and MarketScreener), but the full transcript could not be retrieved in this environment. See event calendar and transcript reference .
As a result, specific Q&A themes, responses, and tone changes cannot be cited here.

Estimates Context

Wall Street consensus via S&P Global for Q4 and Q3 2017 was requested but unavailable due to an S&P Global daily limit error; therefore, comparisons to consensus cannot be provided at this time. Values retrieved from S&P Global were unavailable due to API limits.

Key Takeaways for Investors

Core FFO resilience despite GAAP EPS pressure: FX losses and higher interest expense weighed on GAAP results, but Core FFO per share rose 3.8% YoY to $2.75, highlighting underlying operating strength .
Same-store pricing power: Realized rent per occupied square foot increased, driving same-store revenue/NOI growth even as occupancy moderated YoY .
Development pipeline progressing: Remaining development spend reduced to ~$350m with execution over the next ~18 months; continued acquisitions and JV consolidation support non-same-store growth .
Sensitivity to FX and OpEx: Euro-denominated debt FX translation remains a quarter-to-quarter headwind; property taxes and payroll/repairs continue to pressure OpEx .
Dividend stability and ample liquidity: $2.00 common dividend declared; $1.58B raised in 2017 across preferred and notes, supporting balance sheet strength and growth investment .
Hurricane impacts are largely one-off and excluded from Core FFO; monitor insurance and repair capex tail end in 2018 .
Without consensus data, focus on operational KPIs and Core FFO trends; any estimate revisions would likely reflect modest occupancy normalization and price-led revenue growth absent extraordinary FX volatility.

Public Storage (PSA)·Q4 2017 Earnings Summary