Shurgard Announces Fourth Quarter and 2004 Annual Results and Date for

    Business Editors

    SEATTLE--(BUSINESS WIRE)--March 29, 2005--Shurgard Storage Centers, Inc. (NYSE:SHU), a leading self-storage real estate investment trust (REIT) in the United States and Europe, today released results for the fiscal year and quarter ended December 31, 2004 and filed its annual report on Form 10-K with the Securities and Exchange Commission. The company announced that net income for the full year was $45.3 million, up 20% from $37.6 million reported in 2003. Basic net income per share increased to $0.72 in 2004 from $0.63 in 2003. Diluted net income per share increased to $0.71 in 2004 from $0.62 in 2003. Net income for the fourth quarter was $6.6 million, up from $3 million in the fourth quarter of 2003. Basic and diluted net income per share attributable to common shareholders for the quarter was $0.08 compared to $0.0 for the equivalent quarter in 2003.
    This improvement in net income was driven, in part, by the significant internal growth in U.S. NOI, gains on the sale of certain domestic properties, foreign exchange gains and a decrease in impairment losses from 2003 levels. Because we acquired additional ownership interests in Shurgard Europe these gains were largely offset by an increased share of the operating losses of Shurgard Europe (which were consolidated in the company's financial statement for the first time in 2004) and increased interest and depreciation expenses. Net income was also affected by the reserve of $2.8 million for the previously announced probable settlement of the wage and hour class action lawsuit and a decrease in the amortization income related to the participation rights discount.
    Charles K. Barbo, Shurgard's chairman and chief executive officer stated, "We are pleased with the results of both our U.S. and European stores in 2004. In particular, the solid growth in our same store revenues and Net Operating Income (NOI) for 2004 was very encouraging." The Company reported that Same Store NOI after leasehold and indirect costs was up 5% and 15% over the previous year for the United States and Europe, respectively.

    Funds from Operations (FFO)

    FFO attributable to common shareholders for the fourth quarter of 2004 was $25.2 million, up 26% from $20 million in the fourth quarter of 2003. This corresponds to FFO per share of $0.53 in the fourth quarter of 2004 compared to $0.43 in the fourth quarter of 2003. FFO for the full year 2004 was $96.6 million compared with $88.4 million in 2003, an increase of 9.3%. The main components of this movement are the same as for net income, except for the exclusion of gains on sales of properties and depreciation. FFO per share for the year was $2.07 per share compared to $2.15 for the full year 2003. The dilution in FFO per share is primarily related to the issuance of additional equity commencing mid-2003 as we increased our ownership interest in Shurgard Europe.

    Guidance for 2005

    "We see a trend of continued revenue growth in both our U.S. and European store portfolios, based on the first two months of 2005," commented David K. Grant, president and chief operating officer of Shurgard. "Our current estimates project Same Store NOI to grow by 3% to 4% in the United States and by 12% to 15% in Europe in 2005 compared to 2004." Shurgard also expects to develop approximately 20 new stores in Europe and 5 to 10 new stores in the United States during 2005. We currently project FFO per share for 2005 to increase by 9% to 16% over 2004 levels ($2.25 to $2.40 per share). We expect earnings per share to be in the range of $0.39 to $0.54. Management expects general and administrative expenses will remain high, comparable to 2004 levels, as the Company continues to bolster its controls and processes in order to comply with Section 404 of the Sarbanes-Oxley Act. These estimates are dependent on certain assumptions made for store performance, levels of overhead cost and new store development. The estimates assume an average interest rate on non-hedged variable rate debt of 3.5% and conversion of Shurgard Europe's results from euros to U.S. dollars at an average exchange rate unchanged from year-end 2004. These could all vary from management's forecast.

    Domestic Operating Results

    During the fourth quarter of 2004, the Domestic Same Store segment generated growth in revenue of 5.3% and NOI before leasehold and indirect expenses of 7.1% over the fourth quarter of 2003. Growth in NOI after leasehold and indirect expenses in the quarter was 3.9% over the same quarter in 2003. Domestic Same Store revenue and NOI before leasehold and indirect expenses increased 4.6% and 5.5%, respectively, for the full year 2004, compared to the previous year. NOI after leasehold and indirect expenses increased 5.0% from the previous year.

    European Operating Results

    At constant exchange rates, the Europe Same Store segment in the fourth quarter of 2004 generated increases in revenue of 7.7% and NOI before leasehold and indirect expenses of 2.0% over the fourth quarter of 2003. NOI after leasehold and indirect expenses in the quarter grew 0.5% from the same quarter in 2003. Strong revenue growth due to a combination of occupancy gains and rental rate growth was largely offset during the quarter by increased operating expenses, primarily related to special marketing efforts as management targets occupancy growth in the stores not yet at stabilized occupancy levels. At constant exchange rates, Europe Same Stores for the full year 2004 generated growth in revenue and NOI after leasehold and indirect expenses of 9.5% and 15.5%, respectively, over the previous year.
    The average occupancy for the full year 2004 of the Europe Same Store pool (75%) is lower than the average occupancy of the Domestic Same Store portfolio during the same period (85%), in part because of the significantly younger average age of the stores in the European portfolio, with some stores in the Europe Same Store pool still in rent-up. The Company also believes its operating performance in Europe continues to be influenced by weaker economies in some of its European markets and by a temporary over-supply in certain markets from new developments by Shurgard and its competitors.

    Portfolio

    As of December 2004, Shurgard operated an international network of 633 operating properties containing approximately 39.9 million net rentable square feet. The total includes 475 owned, partially owned or leased storage centers in operation in the United States, 23 stores in the United States that we manage for third parties and 135 owned or partially owned stores in Europe. Of the 610 owned, partially owned or leased stores in the United States and Europe, 483 are classified as Same Stores and 127 are classified as New Stores.
    Together, the Domestic and Europe New Store groups now represent 29% of Shurgard's investment in storage centers, but these contributed only 4% of total NOI after leasehold and indirect expenses reported for the full year 2004. Mr. Grant emphasized, "These stores are still in various stages of rent-up and consequently have not yet achieved their targeted revenue and operating potential. In the future, as these facilities realize their potential, the future growth of the company should be significantly bolstered."
    During the fourth quarter of 2004, the Company added 13 new properties to its domestic and European network. Two new storage centers were completed and five were acquired in the United States, while six new stores were completed in Europe. During the quarter Shurgard retired the participation rights in the CCP/Shurgard joint venture portfolio and acquired four stores related to those rights, in a transaction that closed on December 10, 2004. The two newly constructed domestic stores had a total capitalized cost as of the end of the fourth quarter of $5.3 million and contained 93,000 net rentable square feet. The five new domestic stores acquired by the Company, had an acquisition cost of $21.1 million, net of debt of $17.4 million. These stores contain 346,000 net rentable square feet. The six new stores in Europe have a capitalized cost of $42 million and contain 305,000 net rentable square feet.
    For the full year 2004, the Company added a total of 16 new stores in the United States: seven of which were acquisitions and nine new developments. Thirteen new stores were added in Europe: one an acquisition and twelve new developments.
    At the end of the 2004, the Company had one store under construction and four pending construction in the United States. These stores have an estimated total completed cost of $38.1 million. At the end of the quarter, Shurgard Europe had four storage centers under construction: two in the United Kingdom, one in Germany and one in France. These stores had an estimated total completed cost of $33.5 million. In addition, there were eight new sites in Europe pending construction.
    Mr. Grant observed, "Management continues to look at ways to realize additional value from its existing portfolio with particular focus on older stores that could benefit from redevelopment or, in cases where they are no longer considered to be of strategic value, sold to other operators or investors." Shurgard currently has six properties undergoing redevelopment and nine approved for redevelopment in the near term.

    Status of Management's Report on Internal Control over Financial Reporting

    Although management has not completed its assessment of our internal control over financial reporting for 2004, the Company has made significant progress towards enhancing the overall system of internal controls. These include recruiting several key finance and accounting personnel with extensive public company and REIT experience, appointing new Directors to our Board with audit and international public company backgrounds, instituting appropriate accounting policies, procedures and reconciliation processes, and implementing a new consolidation program, among other initiatives. Dev Ghose, executive vice president and chief financial officer noted "Upon the completion of our internal control over financial reporting assessment, we will file an amended Form 10-K for 2004 to provide the updated Management Report on Internal Control over Financial Reporting. The remediation of all material weaknesses in internal control over financial reporting in the near-term continues to remain the highest priority goal for our Company."

    Quarterly Management Conference Call

    A conference call is scheduled for Wednesday, March 30, 2005, at 10:00 am (Pacific) to discuss the 2004 fourth quarter and year-end results. The public is invited to listen to the call live via the Internet by clicking the appropriate links on the Company's website at http://www.shurgard.com/ir. The call also is available live on a listen-only basis by dialing 800-366-7417 (US & CN callers) and 303-205-0066 (International Callers). A taped replay of the conference call is available via the Internet address listed above until April 6, 2005 or via telephone until April 6, 2004, at 303-590-3000 (US & CN callers) and 800-405-2236 (International callers) access code 11027438#

    The Company uses Funds from Operations ("FFO") in addition to net earnings to report its operating results. The Company uses the definition of FFO adopted by the National Association of Real Estate Investment Trusts as interpreted by the Securities and Exchange Commission. Accordingly, FFO is defined as net earnings (computed in accordance with GAAP), excluding gains (losses) on dispositions of interests in depreciated operating properties and real estate depreciation and amortization expenses. FFO includes the Company's share of FFO of unconsolidated real estate ventures and discontinued operations and excludes minority interests in real estate depreciation and amortization expenses. The Company believes FFO is a meaningful disclosure as a supplement to net earnings because net earnings assumes that the values of real estate assets diminish predictably over time as reflected through depreciation and amortization expenses. The Company believes that the values of real estate assets fluctuate due to market conditions. The Company's calculation of FFO may not be comparable to similarly titled measures reported by other companies because not all companies calculate FFO in the same manner. FFO is not a liquidity measure and should not be considered as an alternative to cash flows or indicative of cash available for distribution. It also should not be considered an alternative to net earnings, as determined in accordance with U.S. GAAP, as an indication of the Company's financial performance. A reconciliation of GAAP net income to FFO is included in the tables attached to this release.

    Statements in this release concerning the beliefs, expectations, intentions, future events, future performance, business prospects and business strategy in the United States and Europe, including statements regarding the earnings guidance, projected development activity, including our projected revenues, expenses, FFO projections, and net income projections for 2004 and beyond, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act and are based on several assumptions. If any of these assumptions are not satisfied or prove to be incorrect, actual results could differ materially from those indicated in the forward-looking statements. The risks and uncertainties that may cause these forward-looking statements to prove to be incorrect include the risks that implementation of the business plan, including marketing and sales initiatives, will not be successful and that the Company's earnings, expenses or revenues may be affected by other factors, such as: the risk that changes in economic conditions in the markets in which we operate; the risk that competition from new self storage facilities or other storage alternatives may cause rent to decline and may cause occupancy rates to drop, or may cause delays in lease up of newly developed properties; the risk that new developments could be delayed or reduced; the risk that the Company may experience increases in the cost of labor, taxes, marketing and other operating and construction expenses; the risk that tax law changes may change the taxability of future income; the risk that increases in interest rates may increase the cost of refinancing long term debt; and the risk that the Company's alternatives for funding its business plan may be impaired by the economic uncertainty due to the impact of war or terrorism; and the risk that the Company's interest in Shurgard Europe may be adversely impacted if that entity is unable to complete formation and funding of its contemplated development joint ventures. We may also be affected by pending legislation and deadlines imposed by the Sarbanes-Oxley Act of 2002. Changes in accounting principles, including impending changes in accounting for stock options, may affect the Company's reported results of operations and financial position. The information presented in this release reflects Shurgard's expectations as of the date of this release. Except as required by law, Shurgard undertakes no obligation to update or revise the information provided herein.
    For a discussion of additional risks and other factors that could affect these forward-looking statements and Shurgard's financial performance, see Shurgard's Annual Report on Form 10-K for the year ended December 31, 2004, filed with the SEC on March 29, 2005, and Form 10-Q for the quarter ending March 31, 2004, filed with the SEC on July 12, 2004, Form 10-Q for the quarter ending June 30, 2004, filed with the SEC on August 13, 2004, and Form 10-Q for the quarter ending September 30, 2004, filed with the SEC on November 9, 2004.

    INDEX of TABLES TO FOLLOW:

    Table 1. Consolidated Statements of Net Income for the years ended December 31, 2004, 2003, and 2002

    Table 2. Consolidated Statements of Net Income for the three months ended December 31, 2004 and 2003

    Table 3. Consolidated Balance Sheet as of December 31, 2004 and 2003

    Table 4. FFO Reconciliation for the year ended December 31, 2004, 2003 and 2002 and for the three months ended December 31, 2004 and 2003

    Table 5. Europe FFO Reconciliation for the year ended December 31, 2004.

    Table 6. Changes in Net Income for the year December 31, 2004 compared to the year ended December 31, 2003

    Table 7. Earnings Per Share for the year ended December 31, 2004, 2003 and 2002

    Table 8. Earnings Per Share for the three months ended December 31, 2004 and 2003

    Table 9. Segment reporting information results for the year ended December 31, 2004

    Table 10. Domestic Same Store Results for the three months ended December 31, 2004 and 2003

    Table 11. Domestic Same Store Results for the year ended December 31, 2004, 2003, and 2002

    Table 12. Summary of Operating Self Storage Properties

    Table 13. Europe Same Store Results for the three months ended December 31, 2004 and 2003

    Table 14. Europe Same Store Results for the year ended December 31, 2004, 2003 and 2002

    Table 15. Annual comparison for Europe Same Store for 2004 versus 2003 and the annual comparison for Europe Same Store for 2003 versus 2002

    Table 16. Domestic Same Store Vintage Analysis for the years ended December 31, 2004, 2003 and 2002

    Table 17. Europe Development Performance Vintage Analysis for the years ended December 31, 2004, 2003 and 2002

    Table 18. Foreign exchange translation for the years ended December 31, 2004 and 2003

    Table 19. Store Asset Values and Operating Information for the three months ended December 31, 2004

Table 1: SHURGARD STORAGE CENTERS, INC. YEAR-TO-DATE OPERATING RESULTS Consolidated Statements of Net Income for the year ended December 31, 2004, 2003, and 2002 (Amounts in thousands except share data)

For the year ended December 31, ----------------------------- 2004 2003 2002 -------- -------- -------- Revenue Storage center operations $420,560 $292,357 $263,365 Other 5,101 6,877 6,080 -------- -------- -------- Total revenue 425,661 299,234 269,445 -------- -------- -------- Expenses Operating 185,547 99,857 84,045 Depreciation and amortization 87,728 55,783 50,654 Real estate taxes 34,114 27,850 25,403 Impairment losses 80 12,671 1,626 General, administrative and other 32,960 18,012 9,880 -------- -------- -------- Total expenses 340,429 214,173 171,608 -------- -------- -------- Income from storage center operations 85,232 85,061 97,837 -------- -------- -------- Other Income (Expense) Interest: Interest on loans (82,876) (51,182) (40,051) Amortization of participation rights discount 1,123 5,529 (4,824) Loss on derivatives (615) (2,194) (10,999) Foreign exchange gain (loss) 6,247 (431) - Interest income and other, net 4,359 4,887 6,311 -------- -------- -------- Other expense, net (71,762) (43,391) (49,563) -------- -------- -------- Income before equity in earnings of other real estate investments, net and minority interest and income taxes 13,470 41,670 48,274 Minority interest 16,608 (1,206) (866) Equity in earnings (losses) of other real estate investments, net 93 (3,099) (1,178) Income tax expense (72) (1,611) - -------- -------- -------- Income from continuing operations 30,099 35,754 46,230 -------- -------- --------

Discontinued operations Income from discontinued operations 1,309 1,884 1,829 Gain on sale of discontinued operations 16,226 - - -------- -------- -------- Total discontinued operations 17,535 1,884 1,829

Cumulative effect of change in accounting principle (2,339) - - -------- -------- -------- Net Income 45,295 37,638 48,059

Net Income Allocation Preferred stock dividends (11,897) (11,896) (16,639) -------- -------- -------- Net income available to common shareholders $ 33,398 $ 25,742 $ 31,420 ======== ======== ========

Net Income per Common Share - Basic: Income from continuing operations available to common shareholders $ 0.39 $ 0.59 $ 0.86 Discontinued operations 0.38 0.04 0.05 Cumulative effect of change in accounting principle (0.05) - - -------- -------- -------- Net income per share $ 0.72 $ 0.63 $ 0.91 ======== ======== ========

Net Income per Common Share - Diluted: Income from continuing operations available to common shareholders $ 0.39 $ 0.58 $ 0.84 Discontinued operations 0.37 0.04 0.05 Cumulative effect of change in accounting principle (0.05) - - -------- -------- -------- Net income per share $ 0.71 $ 0.62 $ 0.89 ======== ======== ========

Distributions per common share $ 2.19 $ 2.15 $ 2.11 ======== ======== ========

Table 2: SHURGARD STORAGE CENTERS, INC. QUARTER-TO-DATE OPERATING RESULTS Consolidated Statements of Net Income for the three months ended December 31, 2004 and 2003 (unaudited) (Amounts in thousands except share data)

For the three months ended December 31, ------------------- 2004 2003 -------- -------- Revenue Storage center operations $110,476 $ 75,574 Other 1,214 1,476 -------- -------- Total revenue 111,690 77,050 -------- -------- Expenses Operating 54,295 26,166 Depreciation and amortization 24,639 15,198 Real estate taxes 8,144 6,911 Impairment losses 80 10,831 General, administrative and other 9,633 8,486 -------- -------- Total expenses 96,791 67,592 -------- -------- Income from storage center operations 14,899 9,458 -------- -------- Other Income (Expense) Interest: Interest on loans (23,279) (13,884) Amortization of participation rights discount 2,123 6,369 (Loss) gain on derivatives (226) 101 Foreign exchange gain (loss) 6,740 (152) Interest income and other, net 2,052 2,447 -------- -------- Other expense, net (12,590) (5,119) -------- -------- Income before equity in earnings of other real estate investments, net and minority interest and income taxes 2,309 4,339 Minority interest 4,253 (345) Equity in earnings (losses) of other real estate investments, net 46 (747) Income tax expense (25) (681) -------- -------- Income from continuing operations 6,583 2,566 -------- -------- Discontinued operations Income from discontinued operations 154 442 Gain on sale of discontinued operations (97) - -------- -------- Total discontinued operations 57 442 -------- -------- Net income 6,640 3,008

Net Income Allocation Preferred stock dividends (2,974) (2,974) -------- -------- Net income available to common shareholders $ 3,666 $ 34 ======== ========

Net Income per Common Share - Basic: Income from continuing operations available to common shareholders $ 0.08 $ (0.01) Discontinued operations - 0.01 -------- -------- Net income per share $ 0.08 $ - ======== ========

Net Income per Common Share - Diluted: Income from continuing operations available to common shareholders $ 0.08 $ (0.01) Discontinued operations - 0.01 -------- -------- Net income per share $ 0.08 $ - ======== ========

Distributions per common share $ 0.55 $ 0.54 ======== ========

Table 3: SHURGARD STORAGE CENTERS, INC. BALANCE SHEET Consolidated Balance Sheet as of December 31, 2004 and 2003 (Amounts in thousands except share data)

Dec. 31, Dec. 31, 2004 2003 ---------- ---------- ASSETS: Storage centers: Operating storage centers $3,143,488 $1,902,636 Less accumulated depreciation (479,531) (322,005) ---------- ---------- Operating storage centers, net 2,663,957 1,580,631 Construction in progress 58,431 38,867 Properties held for sale 8,328 1,530 ---------- ---------- Total storage centers 2,730,716 1,621,028 ---------- ---------- Investment in Shurgard Europe - 319,267 Cash and cash equivalents 50,277 11,670 Restricted cash 7,181 1,585 Notes receivable affiliate - 56,543 Goodwill 24,206 24,206 Other assets 120,504 32,792 ---------- ---------- Total assets $2,932,884 $2,067,091 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY: Accounts payable and accrued expenses $ 60,938 $ 30,260 Other Liabilities 112,014 46,602 Lines of credit 397,300 263,220 Notes payable 1,287,202 711,026 Participation rights liability, net of $4,053 discount at December 31, 2003 - 40,623 ---------- ---------- Total liabilities 1,857,454 1,091,731 ---------- ----------

Minority interest 169,232 20,940

Commitments and contingencies (Notes 5, 11, 16, 25 and 26)

Shareholders' equity: Series C Cumulative Redeemable Preferred Stock; $0.001 par value; 2,000,000 shares authorized; 2,000,000 shares issued and outstanding; liquidation preference of $50,000 48,115 48,115 Series D Cumulative Redeemable Preferred Stock; $0.001 par value; 3,450,000 shares authorized; 3,450,000 shares issued and outstanding; liquidation preference of $86,250 83,068 83,068 Class A Common Stock, $0.001 par value; 120,000,000 authorized; 46,624,900 and 45,747,751 shares issued and outstanding, respectively 47 46 Additional paid-in capital 1,127,138 1,100,949 Accumulated deficit (354,985) (287,516) Accumulated other comprehensive income 2,815 9,758 ---------- ---------- Total shareholders' equity 906,198 954,420 ---------- ---------- Total liabilities and shareholders' equity $2,932,884 $2,067,091 ========== ==========

Table 4: SHURGARD STORAGE CENTERS, INC. FFO FFO Reconciliation for the year ended December 31, 2004, 2003 and 2002 and for the three months ended December 31, 2004 and 2003 (unaudited) (in thousands except share data)

For the year ended December 31, ----------------------------- (in thousands) 2004 2003 2002 -------- -------- -------- Net income $ 45,295 $ 37,638 $ 48,059 Depreciation and amortization (1) 77,131 52,715 48,266 Depreciation and amortization from unconsolidated joint ventures and subsidiaries - 12,150 1,077 Gain on sale of operating properties (16,226) (2,238) (983) Cumulative effect of accounting change 2,339 - - -------- -------- -------- FFO 108,539 100,265 96,419 Preferred distribution (11,897) (11,896) (14,695) Preferred stock redemption issue costs - - (1,944) -------- -------- -------- FFO attributable to common shareholders $ 96,642 $ 88,369 $ 79,780 ======== ======== ========

FFO per share $ 2.07 $ 2.15 $ 2.27 ======== ======== ========

For the three months ended December 31, -------------------- (in thousands) 2004 2003 -------- -------- Net income $ 6,640 $ 3,008 Depreciation and amortization (1) Depreciation and amortization from unconsolidated joint ventures and subsidiaries 21,583 14,501 Gain on sale of operating properties - 7,249 Cumulative effect of accounting change - (1,708) -------- -------- FFO 28,223 23,050 Preferred distribution (2,974) (2,974) Preferred stock redemption issue costs - - -------- -------- FFO attributable to common shareholders $ 25,249 $ 20,076 ======== ========

FFO per share $ 0.53 $ 0.43 ======== ========

(1) Excludes depreciation related to non-real estate assets and minority interests in depreciation and amortization and includes depreciation and amortization of discontinued operations.

Table 5: SHURGARD STORAGE CENTERS, INC. Split of FFO between Shurgard Europe and Shurgard U.S. For the year ended December 31, 2004 (unaudited) (in thousands except share data)

Shurgard Shurgard Consolidated Europe U.S. Shurgard Storage Centers, Inc. --------- --------- ------------

Net income (loss) $(27,767) $73,062 $45,295 Depreciation and amortization (1) 17,458 59,673 77,131 Gain on sales of operating properties (16,226) (16,226) Minority interest in FFO 1,454 (1,454) - Cumulative effect of change in accounting principle 2,339 - 2,339 --------- --------- ------------ FFO $(6,516) $115,055 $108,539 ========= ========= ============

(1) Excludes depreciation related to non-real estate assets and minority interests in depreciation and amortization and includes depreciation and amortization of discontinued operations.

Table 6: SHURGARD STORAGE CENTERS, INC. COMPONENTS OF CHANGES IN NET INCOME Changes in Net Income for the year December 31, 2004 compared to the year ended December 31, 2003 (unaudited)

Diluted Change in earnings (In thousands except share data) Net per Income share (1) --------- -------- Impact of : Gain on sale of properties from discontinued operations $ 16,226 $ 0.40 Increase in domestic operating income before General, administrative and other 9,267 0.23 Decrease in impairment losses 12,591 0.31 Decrease in amortization income related to participation rights discount (4,406) (0.11) Increase in ownership of Shurgard Europe (net of minority interest) (12,068) (0.29) Additional depreciation on basis difference of Shurgard Europe's assets (3,979) (0.10) Cumulative effect of change in accounting principle in 2004 (2,339) (0.06) Increase in domestic General, administrative other than STG exit costs and stock compensation expense (3,731) (0.09) Increase in stock compensation expense (2,283) (0.06) Exit costs of containerized storage operations (STG) (2,276) (0.06) Increase in interest on loans (3,124) (0.08) Increase in unrealized foreign exchange gain on intercompany debt 2,088 0.05 Domestic gains and losses on derivatives 2,824 0.07 Other, net (including the effect of additional shares outstanding) (1,133) (0.12) -------- ------ Increase in Net income $ 7,657 $ 0.09 ======== ======

(1) The diluted earnings per share impact is calculated using the weighted average shares for the year ended December 31, 2003.

Table 7: SHURGARD STORAGE CENTERS, INC. EARNINGS PER SHARE Earnings Per Share for the year ended December 31, 2004, 2003 and 2002

Effect of Basic dilutive Diluted (in thousands except share Per stock Per data) Earnings share options share --------- -------- ---------- -------- For the year ended December 31, 2004 Number of shares 45,968 658 46,626 Income from continuing operations $ 30,099 Less: preferred distributions and other (11,897) (296) (296) -------- Income from continuing operations available to common shareholders adjusted 18,202 $ 0.39 $ - $ 0.39 Discontinued operations 17,535 0.38 (0.01) 0.37 Cumulative effect of change in accounting principle (2,339) (0.05) - (0.05) -------- ------- ------ ------- Net Income $ 33,398 $ 0.72 $(0.01) $ 0.71 ======== ======= ====== =======

For the year ended December 31, 2003 Number of shares 40,406 582 40,988 Income from continuing operations $ 35,754 Less: preferred distributions and other (11,896) (185) (185) -------- Income from continuing operations available to common shareholders adjusted 23,858 $ 0.59 $(0.01) $ 0.58 Discontinued operations 1,884 0.04 - 0.04 -------- ------- ------ ------- Net Income $ 25,742 $ 0.63 $(0.01) $ 0.62 ======== ======= ====== =======

For the year ended December 31, 2002 Number of shares 34,456 640 35,096 Income from continuing operations $ 46,230 Less: preferred distributions (14,695) Less: preferred stock redemption issue cost (1,944) (131) (95) -------- Income from continuing operations available to common shareholders 29,591 $ 0.86 $(0.02) $ 0.84 Discontinued operations 1,829 0.05 - 0.05 -------- ------- ------ ------- Net Income $ 31,420 $ 0.91 $(0.02) $ 0.89 ======== ======= ====== =======

Table 8: SHURGARD STORAGE CENTERS, INC. EARNINGS PER SHARE Earnings Per Share for the three months ended December 31, 2004 and 2003 (unaudited)

Effect of Basic dilutive Diluted (in thousands except share data) Per stock Per Earnings share options share -------- ------- ---------- -------- For the three months ended December 31, 2004 Number of shares 46,416 678 47,094 Income from continuing operations $ 6,583 Less: preferred distributions and other (2,974) (65) (65) ------- Income from continuing operations available to common shareholders adjusted 3,609 $ 0.08 $ - $ 0.08 Discontinued operations 57 - - - ------- ------- ---- ------- Net Income $ 3,666 $ 0.08 $ - $ 0.08 ======= ======= ==== =======

For the three months ended December 31, 2003 Number of shares 45,560 711 46,271 Income from continuing operations $ 2,566 Less: preferred distributions and other (2,974) (50) (50) ------- Income from continuing operations available to common shareholders adjusted (408) $ (0.01) $ - $ (0.01) Discontinued operations 442 0.01 - 0.01 ------- ------- ---- ------- Net Income $ 34 $ - $ - $ - ======= ======= ==== =======

Table 9: SHURGARD STORAGE CENTERS, INC. SEGMENT REPORTING INFORMATION RESULTS Segment reporting information results for the year ended December 31, 2004 (unaudited)

Year ended December 31, 2004 (dollars in thousands except average rent) Domestic Europe Total ------------------ ------------------ ------------------ Same Store % of % of % of (1) Amount total Amount total Amount total ------------ ----------- ------ ----------- ------ ----------- ------ Number of Storage Centers 411 87% 72 53% 483 79% Revenues $ 288,069 90% $ 73,241 72% $ 361,310 86% NOI after indirect and leasehold expense $ 176,410 93% $ 32,301 117% $ 208,711 96% Avg. annual rent per sq. ft. $ 11.53 $ 21.52 Avg. sq. ft. occupancy (3) 85% 75% Total Storage Center Costs (4) $1,602,382 82% $ 618,821 54% $2,221,203 71%

New Store (2) ------------ Number of Storage Centers 64 13% 63 47% 127 21% Revenues $ 32,242 10% $ 28,868 28% $ 61,110 14% NOI after indirect and leasehold expense $ 12,826 7% (4,729) -17% $ 8,097 4% Avg. sq. ft. occupancy (3) 70% 36% Total Storage Center Costs (4) $ 349,127 18% 537,379 46% $ 886,506 29%

Combined New and Same Stores ------------ Number of Storage Centers 475 100% 135 100% 610 100% Revenues $ 320,311 100% $ 102,109 100% $ 422,420 100%

NOI after indirect and leasehold expense $ 189,236 100% $ 27,572 100% $ 216,808 100% Total Storage Center Costs (4) $1,951,509 100% 1,156,200 100% $3,107,709 100%

(1) Our definition of Same Store includes existing storage centers acquired prior to January 1 of the previous year as well as developed properties that have been operating for a full two years as of January 1 of the current year. Our definition of Same Store results in the addition of storage centers each year as new acquisitions and developments meet the criteria for inclusion, so we then include these storage centers in the previous year's comparable data. Other storage companies may define Same Store differently, which will affect the comparability of the data.

(2) Our definition of New Store, as shown in the table above, includes existing domestic facilities that had not been acquired or leased as of January 1 of the previous year as well as developed properties that have not been operating a full two years as of January 1 of the current year.

(3) Average annual rent per square foot is calculated by dividing actual rent collected by the average number of square feet occupied during the period.

(4) Total costs capitalized to storage centers.

Table 10: SHURGARD STORAGE CENTERS, INC. DOMESTIC QUARTER TO DATE SAME STORE RESULTS Domestic Same Store Results for the three months ended December 31, 2004 and 2003 (unaudited)

Same Store Results (1) For the three months ended Dec. 31, ----------------------------------- (dollars in thousands) 2004 2003 % Change ----------- ----------- --------- Storage center operations revenue $ 72,734 $ 69,102 5.3% Operating expense: Personnel expenses 7,888 7,297 8.1% Real estate taxes 5,483 5,646 -2.9% Repairs and maintenance 2,171 2,061 5.3% Marketing expense 2,255 2,793 -19.3% Utilities and phone expenses 2,346 2,213 6.0% Cost of Goods Sold 728 644 13.0% Store admin and other expenses 2,356 2,230 5.7% ----------- ----------- Direct operating and real estate tax expense 23,227 22,884 1.5% ----------- ----------- NOI 49,507 46,218 7.1% Leasehold expense 1,141 748 52.5% ----------- ----------- NOI after leasehold expense 48,366 45,470 6.4% Indirect operating expense (2) 4,702 3,440 36.7% ----------- ----------- NOI after indirect operating and leasehold expense $ 43,664 $ 42,030 3.9% =========== ===========

Avg. annual rent per sq. ft. (3) $ 11.70 $ 11.32 3.4% Avg. sq.ft. occupancy 85% 83% Total net rentable sq. ft. 27,044,000 27,044,000 Number of properties 411 411

(1) Table includes the total operating results of each storage center regardless of our percentage ownership interest in that storage center.

(2) Indirect operating expense includes certain shared property costs such as district and corporate management, purchasing, national contracts personnel and marketing, as well as certain overhead costs allocated to property operations such as business information technology, legal services, human resources and accounting. Does not include containerized storage operations, internal real estate acquisition cost or abandoned development expense. Indirect operating expense is allocated to storage centers based on number of months in operation during the period.

(3) Average annual rent per square foot is calculated by dividing actual rent collected by the average number of square feet occupied during the period.

Table 11: SHURGARD STORAGE CENTERS, INC. DOMESTIC YEAR TO DATE SAME STORE RESULTS Domestic Same Store Results for the year ended December 31, 2004, 2003 and 2002 (1) (unaudited)

As defined in 2004 ----------------------------------- For the year ended December 31, ----------------------------------- (dollars in thousands) 2004 2003 % Change ----------- ----------- --------- Storage center operations revenue $ 288,069 $ 275,397 4.6% Operating expense: Personnel expenses 31,495 28,408 10.9% Real estate taxes 23,830 24,218 -1.6% Repairs and maintenance 8,334 7,967 4.6% Marketing expense 7,550 8,506 -11.2% Utilities and phone expenses 9,787 9,782 0.1% Cost of Goods Sold 3,411 2,970 14.8% Store admin and other expenses 9,107 9,164 -0.6% ----------- ----------- Direct operating and real estate tax expense 93,514 91,015 2.7% ----------- ----------- NOI 194,555 184,382 5.5% Leasehold expense 3,736 3,241 15.3% ----------- ----------- NOI after leasehold expense 190,819 181,141 5.3% Indirect operating expense (2) 14,409 13,153 9.5% ----------- ----------- NOI after indirect operating and leasehold expense $ 176,410 $ 167,988 5.0% =========== ===========

Avg. annual rent per sq. ft. $ 11.53 $ 11.30 2.0% Avg. sq.ft. occupancy 85% 83% Total net rentable sq. ft. 27,044,000 27,044,000 Number of properties as of December 31 411 411

As defined in 2003 ----------------------------------- For the year ended December 31, ----------------------------------- (dollars in thousands) 2003 2002 % Change ----------- ----------- --------- Storage center operations revenue $ 254,549 $ 250,148 1.8% Operating expense: Personnel expenses 25,404 23,014 10.4% Real estate taxes 22,526 23,271 -3.2% Repairs and maintenance 6,954 5,597 24.2% Marketing expense 7,624 8,273 -7.8% Utilities and phone expenses 8,664 8,465 2.4% Cost of Goods Sold 2,784 2,725 2.2% Store admin and other expenses 8,401 8,270 1.6% ----------- ----------- Direct operating and real estate tax expense 82,357 79,615 3.4% ----------- ----------- NOI 172,192 170,533 1.0% Leasehold expense 3,240 3,201 1.2% ----------- ----------- NOI after leasehold expense 168,952 167,332 Indirect operating expense (2) 11,035 9,708 13.7% ----------- ----------- NOI after indirect operating and leasehold expense $ 157,917 $ 157,624 0.2% =========== ===========

Avg. annual rent per sq. ft. $ 11.84 $ 11.85 -0.1% Avg. sq.ft. occupancy 84% 83% Total net rentable sq. ft. 23,386,000 23,386,000 Number of properties as of December 31 361 361

(1) Table includes the total operating results of each storage center regardless of our percentage ownership interest in that storage center.

(2) Indirect operating expense includes certain shared property costs such as district and corporate management, purchasing, national contracts personnel and marketing, as well as certain overhead costs allocated to property operations such as business information technology, legal services, human resources and accounting. Does not include containerized storage operations, internal real estate acquisition cost or abandoned development expense. Indirect operating expense is allocated to storage centers based on number of months in operation during the period.

Table 12: SHURGARD STORAGE CENTERS, INC. Summary of Operating Self Storage Properties (unaudited)

Domestic European Total ------------------------------------- ------------------ Number Net Number Net Number Net of Rentable of Rentable of Rentable Prop- Square Prop- Square Prop- Square erties Feet erties Feet erties Feet ------- ------------------ ---------- ------- ----------

100% owned or leased 373 24,060,000 1 38,000 374 24,098,000 Partially owned or leased, consolidated 99 6,945,000 134 7,277,000 233 14,222,000 Properties under leasing arrangements 3 211,000 - - 3 211,000 Fee managed 23 1,338,000 - - 23 1,338,000 ------- ------------------ ---------- ------- ---------- 498 32,554,000 135 7,315,000 633 39,869,000 ======= ================== ========== ======= ==========

Table 13: SHURGARD STORAGE CENTERS, INC. EUROPEAN QUARTER TO DATE SAME STORE RESULTS European Same Store Results for three months ended December 31, 2004 and 2003 (1) (unaudited)

Three months ended December 31, --------------------------------- (in thousands except average rent) 2004 2003 (3) % Change ---------- ---------- --------- Storage center operations revenue $ 19,691 $ 18,287 7.7% Operating expense: Personnel expenses 2,613 2,358 10.8% Real estate taxes 724 632 14.6% Repairs and maintenance 740 724 2.2% Marketing expense 1,279 681 87.8% Utilities and phone expenses 465 464 0.2% Cost of Goods Sold 638 618 3.2% Store admin and other expenses 1,449 1,261 14.9% ---------- ---------- Direct operating and real estate tax expense 7,908 6,738 17.4% ---------- ---------- NOI 11,783 11,549 2.0% Leasehold expense 426 413 3.1% ---------- ---------- NOI after leasehold expense 11,357 11,136 2.0% Indirect operating expense (2) 2,483 2,307 7.6% ---------- ---------- NOI after indirect operating and leasehold expense $ 8,874 $ 8,829 0.5% ========== ==========

Avg. annual rent per sq. ft. (4) $ 22.69 $ 22.13 2.5% Avg. sq. ft. occupancy 76.9% 73.1% 5.2% Total net rentable sq. ft. 4,078,000 4,078,000 Number of properties 72 72

(1) Amounts for both years have been translated from local currencies at a constant exchange rate using the average exchange rate for the year ended December 31, 2004 for the 2004 to 2003 comparison.

(2) Indirect operating expense includes certain shared property costs such as district and regional management, national contracts personnel and marketing, as well as certain overhead costs allocated to property operations such as business information technology, human resources and accounting. It does not include internal real estate acquisition cost or abandoned development expense. Indirect operating expense is allocated to storage centers based on number of months in operation during the period.

(3) The 2003 results were not consolidated in our Consolidated Financial Statements.

(4) Average annual rent per square foot is calculated by dividing actual rent collected by the average number of square feet occupied during the period.

Table 14: SHURGARD STORAGE CENTERS, INC. EUROPEAN YEAR TO DATE SAME STORE RESULTS European Same Store Results for year ended December 31, 2004, 2003 and 2002 (unaudited)

As defined in 2004 (1) --------------------------------- Year ended December 31, --------------------------------- (in thousands except average rent) 2004 2003(5) % Change ---------- ---------- --------- Storage center operations revenue $ 73,241 $ 66,867 9.5% Operating expense: Personnel expenses 10,035 9,040 11.0% Real estate taxes 3,150 2,888 9.1% Repairs and maintenance 2,786 2,386 16.8% Marketing expense 4,972 4,297 15.7% Utilities and phone expenses 1,846 1,920 -3.9% Cost of Goods Sold 2,515 2,337 7.6% Store admin and other expenses 5,235 4,849 8.0% ---------- ---------- Direct operating and real estate tax expense 30,539 27,717 10.2% ---------- ---------- NOI 42,702 39,150 9.1% Leasehold expense 1,620 1,563 3.6% ---------- ---------- NOI after leasehold expense 41,082 37,587 9.3% Indirect operating expense (3) 8,781 9,610 -8.6% ---------- ---------- NOI after indirect operating and leasehold expense $ 32,301 $ 27,977 15.5% ========== ==========

Avg. annual rent per sq. ft. (4) $ 21.52 $ 21.17 1.7% Avg. sq. ft. occupancy 75.0% 69.6% 7.8% Total net rentable sq. ft. 4,078,000 4,078,000 Number of properties 72 72

As defined in 2003 (2) --------------------------------- Year ended December 31, --------------------------------- (in thousands except average rent) 2003(5) 2002(5) % Change ---------- ---------- --------- Storage center operations revenue $ 44,523 $ 41,714 6.7% Operating expense: Personnel expenses 5,435 4,832 12.5% Real estate taxes 1,714 1,830 -6.3% Repairs and maintenance 1,447 1,287 12.4% Marketing expense 2,309 2,150 7.4% Utilities and phone expenses 1,084 996 8.8% Cost of Goods Sold 1,466 1,084 35.2% Store admin and other expenses 2,718 2,712 0.2% ---------- ---------- Direct operating and real estate tax expense 16,173 14,891 8.6% ---------- ---------- NOI 28,350 26,823 5.7% Leasehold expense 1,167 1,062 9.9% ---------- ---------- NOI after leasehold expense 27,183 25,761 5.5% Indirect operating expense (3) 5,328 5,480 -2.8% ---------- ---------- NOI after indirect operating and leasehold expense $ 21,855 $ 20,281 7.8% ========== ==========

Avg. annual rent per sq. ft. (4) $ 19.28 $ 18.66 3.3% Avg. sq. ft. occupancy 75.5% 73.5% 2.7% Total net rentable sq. ft. 2,736,000 2,736,000 Number of properties 47 47

(1) Amounts have been translated from local currencies at a constant exchange rate using the average exchange rate for 2004 for the 2004 to 2003 comparison and at 2003 average exchange rates for the 2003 to 2002 comparison.

(2) Amounts have been translated from local currencies at a constant exchange rate using the average exchange rate for 2003 for the 2003 to 2002 comparison.

(3) Indirect operating expense includes certain shared property costs such as district and regional management, national contracts personnel and marketing, as well as certain overhead costs allocated to property operations such as business information technology, human resources and accounting. It does not include internal real estate acquisition cost or abandoned development expense. Indirect operating expense is allocated to storage centers based on number of months in operation during the period.

(4) Average annual rent per square foot is calculated by dividing actual rent collected by the average number of square feet occupied during the period.

(5) The 2003 results were not consolidated in our Consolidated Financial Statements.

Table 15: SHURGARD STORAGE CENTERS, INC. EUROPEAN 2004 ANNUAL COMPARISON Annual comparison for European same store of 2004 versus 2003 and the annual comparison for European same store of 2003 versus 2002 (unaudited)

Percent change of 2004 compared to 2003 ----------------------------- 2004 Number of Average Properties Occupancy Revenue NOI Occupancy Rate ----------------------------- ----- --------- ----- Belgium 15 77.1% 4.2% 5.4% 1.5% 1.8% Netherlands 15 69.6% 10.6% 9.8% 10.3% 1.2% France 16 82.3% 11.6% 14.3% 11.0% -0.2% Sweden 17 72.2% 10.9% 10.4% 9.3% 2.1% Denmark 2 73.7% 22.5% 37.9% 16.8% 2.4% United Kingdom 7 72.9% 7.1% -0.6% 4.7% 2.6% ---------- ---------- ------- ----- --------- -----

Europe Totals 72 75.0% 9.5% 9.1% 7.8% 1.7% ========== ========== ======= ===== ========= =====

Percent change of 2003 compared to 2002 ----------------------------- 2003 Number of Average Properties Occupancy Revenue NOI Occupancy Rate ----------------------------- ----- --------- ----- Belgium 14 77.3% 1.2% -4.0% -0.9% 4.5% Netherlands 6 75.4% 10.7% 12.9% 5.2% 4.7% France 11 78.5% 14.2% 21.8% 6.1% 6.5% Sweden 11 70.9% -0.8% -5.8% 1.4% -3.0% United Kingdom 5 74.7% 7.0% 11.7% 7.3% 0.2% ---------- ---------- ------- ----- --------- -----

Europe Totals 47 75.5% 6.7% 5.7% 2.7% 3.3% ========== ========== ======= ===== ========= =====

Table 16: SHURGARD STORAGE CENTERS, INC. DOMESTIC YEAR TO DATE SAME STORE VINTAGE TABLE Domestic Same Store Vintage Analysis for the year December 31, 2004, 2003 and 2002 (unaudited)

(In Total Net millions) Rentable Total sq. ft. Storage when Average Occupancy Number of Center all phases ----------------- Properties Cost (1) are complete 2004 2003 2002 ------------ ---------- ----------- ----- ----- ----- Same Store since 2004 60 $222.6 4,449,000 78% 74% 63% Same Store since 2003 30 137.2 1,845,000 84% 79% 69% Same Store since 2002 or prior 321 1,242.6 20,750,000 86% 85% 85% ------------- ---------- ----------- ----- ----- ----- Same Store total 411 $1,602.4 27,044,000 85% 83% 81% ============= ========== =========== ===== ===== =====

(In thousands) Average Annual Rent (per sq. ft)(2) Revenue ----------------------- ----------------------------- 2004 2003 2002 2004 2003 2002 ------- ------- ------- --------- --------- --------- Same Store since 2004 $8.15 $7.84 $7.20 $30,937 $27,534 $14,658 Same Store since 2003 13.18 12.58 12.50 22,048 20,287 17,881 Same Store since 2002 or prior 12.04 11.82 11.84 235,084 227,576 226,125 ------- ------- ------- --------- --------- --------- Same Store total $11.53 $11.30 $11.47 $288,069 $275,397 $258,664 ======= ======= ======= ========= ========= =========

(In thousands) NOI (after leaseholds expenses) ------------------------------ 2004 2003 2002 --------- --------- ---------- Same Store since 2004 $18,810 $15,800 $7,349 Same Store since 2003 11,596 10,593 8,301 Same Store since 2002 or prior 160,413 154,748 155,562 --------- --------- ---------- Same Store total $190,819 $181,141 $171,212 ========= ========= ==========

(1) Total capitalized costs to storage centers since the store was acquired or developed.

(2) Average annual rent per square foot is calculated by dividing actual rent collected by the average number of square feet occupied during the period.

Table 17: SHURGARD STORAGE CENTERS, INC. EUROPEAN DEVELOPMENT European Development Performance Vintage Analysis for the year ended December 31, 2004, 2003 and 2002 (unaudited)

(in Total Net Average Occupancy millions) Rentable ----------------- Number Total sq. ft. For the year ended, of Storage when all December 31, Prop- Center phases are ----------------- erties Cost (1) complete 2004 2003 2002 --------- --------- ---------- -------- ----- ----- Opened in 2004 Germany 4 $ 28.0 202,000 5.0% - - France 4 24.7 217,000 1.9% - - Denmark 2 15.4 101,000 10.2% - - United Kingdom 3 32.4 123,000 28.9% - - --------- ------ ---------- -------- ----- ----- Total opened in 2004 13 $100.5 643,000 9.3% - - ========= ====== ========== ======== ===== ===== Opened in 2003 Belgium 1 $ 3.8 46,000 51.8% 4.9% - Netherlands 7 42.2 351,000 30.3% 2.1% - Germany 5 38.2 268,000 25.8% 2.6% - France 7 46.9 371,000 25.1% 3.1% - Sweden 2 12.5 94,000 36.2% 7.8% - Denmark 1 8.4 50,000 53.1% 9.5% - United Kingdom 3 34.0 149,000 34.4% 4.2% - --------- ------ ---------- -------- ----- ----- Total opened in 2003 26 $186.0 1,329,000 30.4% 3.5% - ========= ====== ========== ======== ===== ===== Opened in 2002 Belgium 2 $ 7.8 101,000 46.8% 33.7% 11.7% Netherlands 7 44.0 368,000 49.1% 29.7% 5.1% France 7 46.9 376,000 59.5% 35.0% 10.2% Sweden 3 20.2 151,000 66.5% 40.8% 12.5% Denmark 2 15.7 106,000 60.6% 25.1% 2.1% United Kingdom 3 35.4 163,000 61.2% 27.2% 3.7% --------- ------ ---------- -------- ----- ----- Total opened in 2002 24 $170.0 1,265,000 56.6% 32.2% 7.6% ========= ====== ========== ======== ===== =====

New Store Total 63 $456.5 3,237,000 36.5% 14.0% 7.6% ========= ====== ========== ======== ===== =====

Same store: ------------------ Opened in 2001 Belgium 1 $ 4.0 51,000 65.7% 53.5% 25.8% Netherlands 9 51.7 484,000 64.1% 54.2% 32.3% France 5 35.9 280,000 80.2% 65.2% 40.5% Sweden 6 35.7 315,000 69.4% 55.6% 28.3% Denmark 2 14.4 110,000 73.7% 63.1% 42.0% United Kingdom 2 22.2 102,000 61.8% 56.2% 47.1% --------- ------ ---------- -------- ----- ----- Total opened in 2001 25 $163.9 1,342,000 69.4% 57.7% 34.7% ========= ====== ========== ======== ===== ===== Opened in 2000 and before Belgium 14 $ 72.4 855,000 77.8% 77.3% 78.1% Netherlands 6 37.5 345,000 77.2% 75.4% 71.7% France 11 63.2 585,000 83.4% 78.5% 74.0% Sweden 11 68.0 677,000 73.5% 70.9% 70.0% United Kingdom 5 47.6 274,000 77.0% 74.7% 69.6% --------- ------ ---------- -------- ----- ----- Total opened before 2001 47 $288.7 2,736,000 77.8% 75.5% 73.5% ========= ====== ========== ======== ===== ===== Same Store Total 72 $452.6 4,078,000 75.0% 69.6% 60.1% ========= ====== ========== ======== ===== =====

(In thousands) Average Annual Rent (per sq. ft) (2) (3) Revenue (2) ------------------------ -------------------------- For the year ended, For the year ended, December 31, December 31, ------------------------ -------------------------- 2004 2003 2002 2004 2003 2002 ------ ------ ------ ------- ------- ------- Opened in 2004 Germany $17.00 $ - $ - $ 193 $ - $ - France 21.77 - - 106 - - Denmark 18.95 - - 250 - - United Kingdom 19.56 - - 753 - - ------ ------ ------ ------- ------- ------- Total opened in 2004 $19.17 $ - $ - $ 1,302 $ - $ - ====== ====== ====== ======= ======= ======= Opened in 2003 Belgium $14.49 $ 9.43 $ - $ 369 $ 24 $ - Netherlands 19.93 14.97 - 2,266 125 - Germany 14.20 7.62 - 1,069 61 - France 22.24 20.58 - 2,430 287 - Sweden 17.41 13.05 - 717 119 - Denmark 21.98 20.23 - 670 119 - United Kingdom 40.05 36.06 - 2,317 279 - ------ ------ ------ ------- ------- ------- Total opened in 2003 $21.64 $18.11 $ - $ 9,838 $ 1,014 $ - ====== ====== ====== ======= ======= ======= Opened in 2002 Belgium $12.28 $12.18 $11.48 $ 625 $ 454 $ 122 Netherlands 18.82 18.95 14.76 3,614 2,266 152 France 19.93 20.56 19.89 5,183 3,142 632 Sweden 20.05 18.07 17.13 2,277 1,319 255 Denmark 21.44 20.76 10.70 1,503 607 5 United Kingdom 40.32 42.88 34.91 4,526 2,226 109 ------ ------ ------ ------- ------- ------- Total opened in 2002 $22.14 $21.49 $17.85 $17,728 $10,014 $ 1,275 ====== ====== ====== ======= ======= =======

New Store Total $21.82 $21.15 $17.85 $28,868 $11,028 $ 1,275 ====== ====== ====== ======= ======= =======

Same store: ------------------ Opened in 2001 Belgium $15.42 $14.77 $14.02 $ 573 $ 449 $ 209 Netherlands 17.94 17.97 17.45 5,906 5,061 3,032 France 22.05 21.84 21.30 5,554 4,449 2,867 Sweden 18.24 17.50 17.77 4,612 3,602 1,875 Denmark 21.23 20.73 20.33 1,888 1,542 998 United Kingdom 41.01 41.85 37.87 2,876 2,706 2,082 ------ ------ ------ ------- ------- ------- Total opened in 2001 $20.76 $20.68 $20.75 $21,409 $17,809 $11,063 ====== ====== ====== ======= ======= ======= Opened in 2000 and before Belgium $15.87 $15.61 $14.91 $11,684 $11,317 $10,949 Netherlands 22.26 21.45 20.47 6,383 6,052 5,457 France 26.29 26.25 24.66 14,271 13,323 11,702 Sweden 20.80 20.37 20.92 11,821 11,222 11,143 United Kingdom 32.40 31.18 31.13 7,673 7,144 6,687 ------ ------ ------ ------- ------- ------- Total opened before 2001 $21.85 $21.36 $20.64 $51,832 $49,058 $45,938 ====== ====== ====== ======= ======= ======= Same Store Total $21.52 $21.17 $20.68 $73,241 $66,867 $57,001 ====== ====== ====== ======= ======= =======

(In thousands) NOI (2) (4) (after leasehold expenses) -------------------------------- For the year ended, December 31, -------------------------------- 2004 2003 2002 ------- ------- -------- Opened in 2004 Germany $ (887) $ - $ - France (625) (2) - Denmark (259) - - United Kingdom 84 - - ------- ------- -------- Total opened in 2004 $(1,687) $ (2) $ - ======= ======= ======== Opened in 2003 Belgium $ 110 $ (93) $ - Netherlands (357) (829) - Germany (915) (941) - France (783) (790) - Sweden (92) (314) - Denmark 232 (222) - United Kingdom 456 (204) - ------- ------- -------- Total opened in 2003 $(1,349) $(3,393) $ - ======= ======= ======== Opened in 2002 Belgium $ 89 $ (145) $ (255) Netherlands 1,253 51 (580) France 1,658 (5) (791) Sweden 1,008 186 (413) Denmark 560 (191) (254) United Kingdom 2,274 361 (274) ------- ------- -------- Total opened in 2002 $ 6,842 $ 257 $ (2,567) ======= ======= ========

New Store Total $ 3,806 $(3,138) $ (2,567) ======= ======= ======== Same store: ------------------ Opened in 2001 Belgium $ 317 $ 143 $ (57) Netherlands 2,532 1,907 (4) France 3,073 2,010 809 Sweden 2,133 1,399 (223) Denmark 873 633 107 United Kingdom 1,633 1,557 1,035 ------- ------- -------- Total opened in 2001 $10,561 $ 7,649 $ 1,667 ======= ======= ======== Opened in 2000 and before Belgium $ 7,549 $ 7,322 $ 7,630 Netherlands 3,983 4,020 3,561 France 7,993 7,596 6,248 Sweden 6,475 6,366 6,748 United Kingdom 4,521 4,634 4,153 ------- ------- -------- Total opened before 2001 $30,521 $29,938 $ 28,340 ======= ======= ======== Same Store Total $41,082 $37,587 $ 30,007 ======= ======= ========

(1) The actual completed cost of these projects are reported in U.S. dollars translated at the December 31, 2004 exchange rate of $1.36 to the euro. Operating results (see note (2) below) are reported at the average exchange rate for the year 2004 which was $1.24 to the euro. As these exchange rates are different we believe it does not allow for an accurate measure of property investment yield. We believe the application of a constant exchange rate to both the property cost and operating results would provide a more meaningful measure of investment yield. The cost of the storage centers excludes the excess cost of approximately $247 million we paid for part of our ownership interest acquisition in Shurgard Europe in 2003.

(2) The amounts have been translated from local currencies at a constant exchange rate using the average exchange rate for 2004.

(3) Average annual rent per square foot is calculated by dividing actual rent collected by the average number of square feet occupied during the period. On the year of opening the average annual rent is lower as the store had not been opened a full year.

(4) Expenses in some instances may include certain pre- opening costs

Table 18: SHURGARD STORAGE CENTERS, INC. FOREIGN EXCHANGE TRANSLATION Foreign exchange translation for year ended December 31 2004, and 2003

With the significant increase in the Company's interest in Shurgard Europe, and its consolidation beginning in 2004, foreign currency translation will have a greater impact on the quarterly reporting of our financial results. Foreign currency translation could cause volatility in the reported financial results of Shurgard Europe and otherwise limit the comparability of operating results in Europe to operating results in the United States. Specifically, generally accepted accounting principles ("GAAP") prescribe specific foreign currency translation standards. For example, in our case, non- monetary assets are translated according to historical cost. Monetary assets are translated at the Euro/Dollar exchange rate at the end of the applicable period. Revenue, expenses, and other components of the income statement and statement of cash flows are shown at the average of the Euro/Dollar exchange rate during the applicable period. For the year ended December 31, 2004, the average exchange rate between the Euro and the U.S. Dollar was $1.24 per Euro. During the year ended December 31, 2003, the average exchange rate was $1.13 per Euro. Revenues and total expenses for Shurgard Europe increased $20.3 million and $22.3 million, respectively, in 2004 over 2003. At constant rates, using the 2004 average exchange rate, the total increase in revenues and total expenses would be $12.3 million and $13.9 million, respectively, from the year ended December 31, 2003 to the year ended December 31, 2004.

Table 19: SHURGARD STORAGE CENTERS, INC. STORE ASSET VALUES AND OPERATING INFORMATION For the three months ended December 31, 2004 (Unaudited)

Weighted average (in thousands Net except for No. of ownership Rentable Occupancy Gross Book number of Square properties) Properties interest Feet (Q4 Avg) Value (7) ---------- --------- --------- --------- ----------- Same Store ---------------- Domestic wholly owned or leased (1) 328 100% 21,105 85% $1,264,519 Domestic consolidated joint ventures (2) 83 79% 5,939 83% 337,863 European consolidated subsidiary (4) 72 87% 4,078 77% 618,821 ---------- --------- --------- --------- ---------- Total Same Store 483 94% 31,122 84% $2,221,203 ========== ========= ========= ========= ==========

New Store ---------------- Domestic wholly owned or leased developments (1) 22 100% 1,283 67% $ 119,395 Domestic consolidated joint ventures developments (2) 12 73% 728 61% 53,467 Domestic acquisitions (3) 27 96% 1,950 80% 153,784 European consolidated subsidiary developments (4) 30 87% 1,550 60% 296,200 European 20% development ventures developments (5) 32 17% 1,649 30% 225,466 European acquisition (3) 1 100% 38 88% 15,713 Domestic Properties under leasing arrangements (6) 3 0% 211 61% 22,481 ---------- --------- --------- --------- ---------- Total New Store 127 71% 7,409 60% $ 886,506 ========== ========= ========= ========= ==========

TOTALS 610 89% 38,531 79% $3,107,709 ========== ========= ========= ========= ==========

(in thousands Fair except for Applicable Q4 Q4 Leasehold value number of properties) debt (8) Revenue NOI (9) Expense of debt ---------- --------- -------- --------- --------- Same Store ---------------- Domestic wholly owned or leased (1) $ 50,793 $ 59,399 $40,441 $1,116 $ 51,022 Domestic consolidated joint ventures (2) 154,046 13,335 9,066 25 161,184 European consolidated subsidiary (4) 313,797 19,691 11,783 426 313,797 -------- -------- ------- ------ -------- Total Same Store $518,636 $ 92,425 $61,290 $1,567 $526,003 ======== ======== ======= ====== ========

New Store ---------------- Domestic wholly owned or leased developments (1) $ - $ 2,847 $ 1,175 $ 120 $ - Domestic consolidated joint ventures developments (2) 3,807 1,498 668 - 3,837 Domestic acquisitions (3) 36,095 4,517 2,798 - 36,232 European consolidated subsidiary developments (4) 140,614 6,175 2,650 69 140,614 European 20% development ventures developments (5) 137,764 2,920 (691) 61 137,764 European acquisition (3) - 430 247 - - Domestic Properties under leasing arrangements (6) - 584 297 - - -------- -------- ------- ------ -------- Total New Store $318,280 $ 18,971 $ 7,144 $ 250 $318,447 ======== ======== ======= ====== ========

TOTALS $836,916 $111,396 $68,434 $1,817 $844,450 ======== ======== ======= ====== ========

1 Includes owned and leased properties in which we have a 100% interest.

2 Includes properties in which we own an interest less than 100% but that are consolidated in our financial statements. The store information and results reflected the full 100% amounts. Our pro-rata share in the same store pool is approximately 79% and our pro-rata share in the new store pool is represents approximately 73%.

3 Includes all stores acquired in 2004 and 2003.

4 Includes properties developed under Shurgard Europe in which we hold an 87.23% interest.

5 Includes properties developed under First and Second Shurgard in which we hold a 17.4% interest.

6 Three storage centers are operated through a leasing arrangement with a California developer for which the storage centers assets are consolidated in our financial statements but not the store operations.

7 Gross Book Value represents the cost of developing properties at the time they were developed, not the value at which partners interests in the properties may have been acquired for at a later date. The actual completed cost of these projects are reported in U.S. dollars translated at the December 31, 2004 exchange rate of $1.36 to the Euro. Operating results are reported at the average exchange rate for the year ended December 31, 2004 which was $1.24 to the Euro. As these exchange rates are different we believe it does not allow for an accurate measure of property investment yield. However, we believe the application of a constant exchange rate to both the property cost and operating results may provide a more meaningful measure of investment yield.

8 Applicable debt represents debt secured against each asset pool. Represents Net Operating Income after Direct Expenses. The indirect expenses not included in NOI for Domestic

9 Same Store, European Same store, Domestic New Store and Europe Store are the following (in thousands except indirect expense per revenue dollar):

Indirect expense Q4 indirect per revenue expense Q4 revenue dollar ---------------- ----------------- --------------- Domestic Europe Domestic Europe Domestic Europe -------- ------- -------- -------- -------- ------ Same Store $4,702 $2,483 $72,734 $13,335 $0.06 $0.19 ------ ------ ------- ------- ----- ----- New Store $ 646 $2,798 $ 9,446 $ 9,525 $0.07 $0.29 ------ ------ ------- ------- ----- -----

--30--BRM/se*

CONTACT: Shurgard Storage Centers, Inc. Dev Ghose or Stuart Blackie, 206-624-8100 or Broadgate Consultants, Inc. Alan Oshiki, 212-232-2222 (Media Contact)

KEYWORD: WASHINGTON INDUSTRY KEYWORD: BUILDING/CONSTRUCTION REAL ESTATE EARNINGS CONFERENCE CALLS SOURCE: Shurgard Storage Centers, Inc.

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