Item 15. Exhibits and Financial Statement Schedules

a.	1.	Financial Statements
				The financial statements listed in the accompanying Index to Financial Statements and Schedules hereof are filed as part of this report.
	2.	Financial Statement Schedules
				The financial statements schedules listed in the accompanying Index to Financial Statements and Schedules are filed as part of this report.
	3.	Exhibits
					See Index to Exhibits contained herein.
b.	Exhibits:
		See Index to Exhibits contained herein.
c.	Financial Statement Schedules
		Not applicable.

‎

	PUBLIC STORAGE
	INDEX TO EXHIBITS (1)
	(Items 15(a)(3) and 15(c))
3.1	Articles of Amendment and Restatement of Declaration of Trust of Public Storage, a Maryland real estate investment trust, filed with the Maryland State Department of Assessments and Taxation on May 4, 2018. Filed with the Registrant’s Current Report on Form 8-K dated May 8, 2018 and incorporated by reference herein.
3.2	Amended and Restated Bylaws of Public Storage, a Maryland real estate investment trust, dated May 4, 2018. Filed with the Registrant’s Current Report on Form 8-K dated May 8, 2018 and incorporated by reference herein.
3.3	Articles Supplementary for Public Storage 5.375% Cumulative Preferred Shares, Series V. Filed with the Registrant’s Current Report on Form 8-K dated September 11, 2012 and incorporated by reference herein.
3.4	Articles Supplementary for Public Storage 5.20% Cumulative Preferred Shares, Series W. Filed with the Registrant’s Current Report on Form 8-K dated January 7, 2013 and incorporated by reference herein.
3.5	Articles Supplementary for Public Storage 5.20% Cumulative Preferred Shares, Series X. Filed with the Registrant’s Current Report on Form 8-K dated March 4, 2013 and incorporated by reference herein.
3.6	Articles Supplementary for Public Storage 5.400% Cumulative Preferred Shares, Series B. Filed with the Registrant’s Current Report on Form 8-K dated January 12, 2016 and incorporated by reference herein.
3.7	Articles Supplementary for Public Storage 5.125% Cumulative Preferred Shares, Series C. Filed with the Registrant’s Current Report on Form 8-K dated May 10, 2016 and incorporated by reference herein.
3.8	Articles Supplementary for Public Storage 4.950% Cumulative Preferred Shares, Series D. Filed with the Registrant’s Current Report on Form 8-K dated July 13, 2016 and incorporated by reference herein.
3.9	Articles Supplementary for Public Storage 4.900% Cumulative Preferred Shares, Series E. Filed with the Registrant’s Current Report on Form 8-K dated October 6, 2016 and incorporated by reference herein.
3.10	Articles Supplementary for Public Storage 5.150% Cumulative Preferred Shares, Series F. Filed with the Registrant’s Current Report on Form 8-K dated May 23, 2017 and incorporated by reference herein.
3.11	Articles Supplementary for Public Storage 5.050% Cumulative Preferred Shares, Series G. Filed with the Registrant’s Current Report on Form 8-K dated July 31, 2017 and incorporated by reference herein.
3.12	Articles Supplementary for Public Storage 5.600% Cumulative Preferred Shares, Series H. Filed with the Registrant’s Current Report on Form 8-K dated February 28, 2019 and incorporated by reference herein.
3.13	Articles Supplementary for Public Storage 4.875% Cumulative Preferred Shares, Series I. Filed with the Registrant’s Current Report on Form 8-K dated September 5, 2019 and incorporated by reference herein.
3.14	Articles Supplementary for Public Storage 4.700% Cumulative Preferred Shares, Series J. Filed with the Registrant’s Current Report on Form 8-K dated November 5, 2019 and incorporated by reference herein.

3.15	Articles Supplementary for Public Storage 4.750% Cumulative Preferred Shares, Series K. Filed with the Registrant’s Current Report on Form 8-K dated December 11, 2019 and incorporated by reference herein.
4.1	Master Deposit Agreement, dated as of May 31, 2007. Filed with the Registrant’s Current Report on Form 8-K dated June 6, 2007 and incorporated by reference herein.
4.2	Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934. Filed herewith.
10.1	Agreement of Limited Partnership of PS Business Parks, L.P. Filed with PS Business Parks, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1998 (SEC File No. 001-10709) and incorporated herein by reference.
10.2	Amended and Restated Agreement of Limited Partnership of Storage Trust Properties, L.P. (March 12, 1999). Filed with PSI’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1999 (SEC File No. 001-0839) and incorporated herein by reference.
10.3	Second Amended and Restated Credit Agreement, dated April 19, 2019, by and among Public Storage, the lenders party thereto, Wells Fargo Bank, National Association, as administrative agent, Wells Fargo Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporation, as joint lead arrangers and as joint bookrunners, Bank of America, N.A., as syndication agent, and Citibank, N.A., as documentation agent. Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 19, 2019 and incorporated herein by reference.
10.4*	Form of 2007 Plan Restricted Stock Unit Agreement. Filed as Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference.
10.5*	Form of 2007 Plan Restricted Stock Unit Agreement – deferral of receipt of shares. Filed as Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference.
10.6*	Form of 2007 Plan Stock Option Agreement. Filed as Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference.
10.7*	Form of 2007 Plan Trustee Stock Option Agreement. Filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference.
10.8*	Form of 2016 Plan Restricted Stock Unit Agreement. Filed as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and incorporated herein by reference.
10.9*	Form of 2016 Plan Restricted Stock Unit Agreement – deferral of receipt of shares. Filed as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and incorporated herein by reference.
10.10*	Form of 2016 Plan Non-Qualified Stock Option Agreement. Filed as Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and incorporated herein by reference.
10.11*	Form of 2016 Plan Trustee Non-Qualified Stock Option Agreement. Filed as Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and incorporated herein by reference.

10.12	Form of Trustee and Officer Indemnification Agreement. Filed as Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and incorporated herein by reference.
10.13	Term Loan Agreement, by and among Public Storage, Wells Fargo Securities, LLC as Lead Arranger and Wells Fargo National Bank N.A. as Administrative Agent, dated as of December 2, 2013. Filed with Registrant’s Current Report on Form 8-K dated December 2, 2013 and incorporated herein by reference.
10.14*	Public Storage 2007 Equity and Performance-Based Incentive Compensation Plan, as Amended. Filed with Registrant’s Current Report on Form 8-K dated May 1, 2014 and incorporated herein by reference.
10.15*	Public Storage 2016 Equity and Performance-Based Incentive Compensation Plan. Filed as Appendix A to the Company’s 2016 Proxy Statement dated March 16, 2016 and incorporated herein by reference.
10.16	Note Purchase Agreement, dated as of November 3, 2015, by and among Public Storage and the signatories thereto. Filed with Registrant’s Current Report on Form 8-K dated November 3, 2015 and incorporated herein by reference.
10.17	Note Purchase Agreement, dated as of April 12, 2016, by and among Public Storage and the signatories thereto. Filed with Registrant’s Current Report on Form 8-K dated April 12, 2016 and incorporated herein by reference.
10.18	Indenture, dated as of September 18, 2017, between Public Storage and Wells Fargo Bank, National Association, as trustee. Filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated September 18, 2017 and incorporated herein by reference.
10.19	First Supplemental Indenture, dated as of September 18, 2017, between Public Storage and Wells Fargo Bank, National Association, as trustee, including the form of Global Note representing the 2022 Notes and the form of Global Note representing the 2027 Notes. Filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated September 18, 2017 and incorporated herein by reference.
10.20	Second Supplemental Indenture, dated as of April 12, 2019, between Public Storage and Wells Fargo Bank, National Association, as trustee, including the form of Global Note representing the 2029 Notes. Filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated April 12, 2019 and incorporated herein by reference.
10.21	Third Supplemental Indenture, dated as of January 24, 2020, between Public Storage and Wells Fargo Bank, National Association, as trustee. Filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated January 24, 2020 and incorporated herein by reference.
10.22	Amendment to Amended Agreement of Limited Partnership of PS Business Parks, L.P. to Authorize Special Allocations, dated as of January 1, 2017. Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018 (SEC File No. 001-33519) and incorporated herein by reference.
10.23*	Form of 2016 Plan Restricted Stock Unit Agreement (2018). Filed as Exhibit 10.25 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and incorporated herein by reference.
10.24*	Form of 2016 Plan Restricted Stock Unit Agreement – deferral of receipt of shares (2018). Filed as Exhibit 10.26 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and incorporated herein by reference.

10.25*	Form of 2016 Plan Non-Qualified Stock Option Agreement (2018). Filed as Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and incorporated herein by reference.
10.26*	Form of 2016 Plan Trustee Non-Qualified Stock Option Agreement (2018). Filed as Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and incorporated herein by reference.
10.27*	Form of 2016 Plan Trustee Deferred Stock Unit Agreement (2018). Filed as Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and incorporated herein by reference.
10.28*	Form of 2016 Plan Executive Restricted Stock Unit Agreement (2018). Filed as Exhibit 10.30 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and incorporated herein by reference.
21	Listing of Subsidiaries. Filed herewith.
23.1	Consent of Ernst & Young LLP. Filed herewith.
31.1	Rule 13a – 14(a) Certification. Filed herewith.
31.2	Rule 13a – 14(a) Certification. Filed herewith.
32	Section 1350 Certifications. Filed herewith.
101 .INS	Inline XBRL Instance Document. Filed herewith.
101 .SCH	Inline XBRL Taxonomy Extension Schema. Filed herewith.
101 .CAL	Inline XBRL Taxonomy Extension Calculation Linkbase. Filed herewith.
101 .DEF	Inline XBRL Taxonomy Extension Definition Linkbase. Filed herewith.
101 .LAB	Inline XBRL Taxonomy Extension Label Linkbase. Filed herewith.
101 .PRE	Inline XBRL Taxonomy Extension Presentation Link. Filed herewith.
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
_ (1)	SEC File No. 001-33519 unless otherwise indicated.
*	Denotes management compensatory plan agreement or arrangement.

‎

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

4
	PUBLIC STORAGE
Date: February 25, 2020	By:/s/ Joseph D. Russell, Jr.
	Joseph D. Russell, Jr., ‎Chief Executive Officer, President and Trustee

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Joseph D. Russell, Jr.	Chief Executive Officer, President and Trustee (principal executive officer)	February 25, 2020
Joseph D. Russell, Jr.
/s/ H. Thomas Boyle	Chief Financial Officer (principal financial officer)	February 25, 2020
H. Thomas Boyle
/s/ Ronald L. Havner, Jr.	Chairman of the Board	February 25, 2020
Ronald L. Havner, Jr.
/s/ Tamara Hughes Gustavson	Trustee	February 25, 2020
Tamara Hughes Gustavson
/s/ Uri P. Harkham	Trustee	February 25, 2020
Uri P. Harkham
/s/ Leslie Stone Heisz	Trustee	February 25, 2020
Leslie Stone Heisz
/s/ B. Wayne Hughes, Jr.	Trustee	February 25, 2020
B. Wayne Hughes, Jr.
/s/ Avedick B. Poladian	Trustee	February 25, 2020
Avedick B. Poladian
/s/ Gary E. Pruitt	Trustee	February 25, 2020
Gary E. Pruitt

Signature	Title	Date
/s/ John Reyes	Trustee	February 25, 2020
John Reyes
/s/ Tariq M. Shaukat	Trustee	February 25, 2020
Tariq M. Shaukat
/s/ Ronald P. Spogli	Trustee	February 25, 2020
Ronald P. Spogli
/s/ Daniel C. Staton	Trustee	February 25, 2020
Daniel C. Staton

‎

PUBLIC STORAGE

INDEX TO FINANCIAL STATEMENTS

AND SCHEDULES

(Item 15 (a))

	Page References
Report of Independent Registered Public Accounting Firm	F-1 – F-2
Balance sheets as of December 31, 2019 and 2018	F-3
For the years ended December 31, 2019, 2018 and 2017:
Statements of income	F-4
Statements of comprehensive income	F-5
Statements of equity	F-6 – F-7
Statements of cash flows	F-8 – F-9
Notes to financial statements	F-10 – F-32
Schedule:
III – Real estate and accumulated depreciation	F-33 – F-35

All other schedules have been omitted since the required information is not present or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the financial statements or notes thereto.

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Trustees of Public Storage

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Public Storage (the Company) as of December 31, 2019 and 2018, and the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2019 and 2018, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 25, 2020 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

F-1

		Purchase Price Allocation
Description of the Matter		For the year ended December 31, 2019, the Company completed the acquisition of 44 real estate facilities for a total purchase price of $429.8 million. As further discussed in Notes 2 and 3 of the consolidated financial statements, the transactions were accounted for as asset acquisitions, and the purchase price was allocated based on a relative fair value of assets acquired and liabilities assumed. Auditing the accounting for the Company’s 2019 acquisitions of real estate facilities was subjective because the Company must exercise a high level of management judgment in determining the fair value of acquired land and the replacement cost of acquired facilities. Determining the fair value of acquired land was difficult due to the lack of available directly comparable land market information. The replacement costs of the acquired facilities were calculated by estimating the cost of building similar facilities in comparable markets and adjusting those costs for the age, quality, and configuration associated with the acquired facilities. Determining the replacement cost was difficult due to the judgment utilized by management in determining the adjustments that should be applied to each facility.
How We Addressed the Matter in Our Audit		We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over management’s accounting for acquired real estate facilities, including controls over the review of assumptions underlying the purchase price allocation and accuracy of the underlying data used. For example, we tested controls over the determination of the fair value of the land and building assets, including the controls over the review of the valuation models and the underlying assumptions used to develop such estimates. For the 2019 acquisitions of real estate facilities described above, our procedures included, but were not limited to, evaluating the sensitivity of changes in significant assumptions on the purchase price allocation. For example, we compared the allocated land and building values to the historical results of self-storage properties acquired in the prior years. We also performed a sensitivity analysis to evaluate the impact on the Company’s financial statements resulting from changes in allocated land and building values. For certain of these asset acquisitions, we also read the purchase agreements, evaluated whether the Company had appropriately determined whether the transaction was a business combination or asset acquisition, evaluated the methods and significant assumptions used by the Company, and tested the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. For certain of these asset acquisitions, we involved our valuation specialists to assist in the assessment of the methodology utilized by the Company, in addition to performing corroborative analyses to assess whether the conclusions in the valuation were supported by observable market data. For example, our valuation specialists used independently identified data sources to evaluate management’s selected comparable land sales and replacement cost assumptions.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 1980.

Los Angeles, California

February 25, 2020

F-2

PUBLIC STORAGE

BALANCE SHEETS

(Amounts in thousands, except share data)

	December 31,			December 31,
	2019			2018
ASSETS
Cash and equivalents	$	409,743		$	361,218
Real estate facilities, at cost:
Land		4,186,873			4,047,982
Buildings		12,102,273			11,248,862
		16,289,146			15,296,844
Accumulated depreciation		(6,623,475)			(6,140,072)
		9,665,671			9,156,772
Construction in process		141,934			285,339
		9,807,605			9,442,111
Investments in unconsolidated real estate entities		767,816			783,988
Goodwill and other intangible assets, net		205,936			209,856
Other assets		174,344			131,097
Total assets	$	11,365,444		$	10,928,270
LIABILITIES AND EQUITY
Notes payable	$	1,902,493		$	1,412,283
Accrued and other liabilities		383,284			371,259
Total liabilities		2,285,777			1,783,542
Commitments and contingencies (Note 13)
Equity:
Public Storage shareholders’ equity:
Preferred Shares, $0.01 par value, 100,000,000 shares authorized,
162,600 shares issued (in series) and outstanding, (161,000 at
December 31, 2018), at liquidation preference		4,065,000			4,025,000
Common Shares, $0.10 par value, 650,000,000 shares authorized,
174,418,615 shares issued and outstanding (174,130,881 shares at
December 31, 2018)		17,442			17,413
Paid-in capital		5,710,934			5,718,485
Accumulated deficit		(665,575)			(577,360)
Accumulated other comprehensive loss		(64,890)			(64,060)
Total Public Storage shareholders’ equity		9,062,911			9,119,478
Noncontrolling interests		16,756			25,250
Total equity		9,079,667			9,144,728
Total liabilities and equity	$	11,365,444		$	10,928,270

See accompanying notes.

F-3

PUBLIC STORAGE

STATEMENTS OF INCOME

(Amounts in thousands, except per share amounts)

	For the Years Ended December 31,
	2019			2018			2017
Revenues:
Self-storage facilities	$	2,684,552		$	2,597,607		$	2,512,433
Ancillary operations		162,271			156,673			156,095
		2,846,823			2,754,280			2,668,528
Expenses:
Self-storage cost of operations		752,579			695,731			657,633
Ancillary cost of operations		44,204			43,991			50,345
Depreciation and amortization		512,918			483,646			454,526
General and administrative		71,983			118,720			82,882
Interest expense		45,641			32,542			12,690
		1,427,325			1,374,630			1,258,076
Other increase (decrease) to net income:
Interest and other income		28,436			26,442			18,771
Equity in earnings of unconsolidated real estate entities		69,547			103,495			75,655
Foreign currency exchange gain (loss)		7,829			18,117			(50,045)
Casualty loss		-			-			(7,789)
Gain on sale of real estate		341			37,903			1,421
Gain due to Shurgard public offering		-			151,616			-
Net income		1,525,651			1,717,223			1,448,465
Allocation to noncontrolling interests		(5,117)			(6,192)			(6,248)
Net income allocable to Public Storage shareholders		1,520,534			1,711,031			1,442,217
Allocation of net income to:
Preferred shareholders - distributions		(210,179)			(216,316)			(236,535)
Preferred shareholders - redemptions (Note 8)		(32,693)			-			(29,330)
Restricted share units		(4,895)			(5,815)			(4,743)
Net income allocable to common shareholders	$	1,272,767		$	1,488,900		$	1,171,609
Net income per common share:
Basic	$	7.30		$	8.56		$	6.75
Diluted	$	7.29		$	8.54		$	6.73
Basic weighted average common shares outstanding		174,287			173,969			173,613
Diluted weighted average common shares outstanding		174,530			174,297			174,151

See accompanying notes.

F-4

PUBLIC STORAGE

STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)

	For the Years Ended December 31,
	2019			2018			2017
Net income	$	1,525,651		$	1,717,223		$	1,448,465
Other comprehensive income (loss):
Aggregate foreign currency exchange gain (loss)		6,999			1,914			(30,003)
Adjust for foreign currency exchange loss reflected
in gain on sale of real estate and gain on Shurgard
public offering		-			27,207			-
Adjust for aggregate foreign currency exchange
(gain) loss included in net income		(7,829)			(18,117)			50,045
Other comprehensive (loss) income		(830)			11,004			20,042
Total comprehensive income		1,524,821			1,728,227			1,468,507
Allocation to noncontrolling interests		(5,117)			(6,192)			(6,248)
Comprehensive income allocable to
Public Storage shareholders	$	1,519,704		$	1,722,035		$	1,462,259

See accompanying notes.

F-5

PUBLIC STORAGE

STATEMENTS OF EQUITY

(Amounts in thousands, except share and per share amounts)

													Accumulated			Total
	Cumulative												Other			Public Storage
	Preferred			Common			Paid-in			Accumulated			Comprehensive			Shareholders’			Noncontrolling			Total
	Shares			Shares			Capital			Deficit			Loss			Equity			Interests			Equity
Balances at December 31, 2016	$	4,367,500		$	17,329		$	5,609,768		$	(487,581)		$	(95,106)		$	9,411,910		$	29,744		$	9,441,654
Issuance of 23,200 preferred shares (Note 8)		580,000			-			(18,823)			-			-			561,177			-			561,177
Redemption of 36,900 preferred shares (Note 8)		(922,500)			-			-			-			-			(922,500)			-			(922,500)
Issuance of common shares in connection with
share-based compensation (564,583 shares) (Note 10)		-			56			42,444			-			-			42,500			-			42,500
Share-based compensation expense, net of cash
paid in lieu of common shares (Note 10)		-			-			22,711			-			-			22,711			-			22,711
Acquisition of noncontrolling interests		-			-			(7,701)			-			-			(7,701)			(6,724)			(14,425)
Contributions by noncontrolling interests		-			-			-			-			-			-			2,484			2,484
Net income		-			-			-			1,448,465			-			1,448,465			-			1,448,465
Net income allocated to noncontrolling interests		-			-			-			(6,248)			-			(6,248)			6,248			-
Distributions to equity holders:
Preferred shares (Note 8)		-			-			-			(236,535)			-			(236,535)			-			(236,535)
Noncontrolling interests		-			-			-			-			-			-			(7,392)			(7,392)
Common shareholders and restricted share
unitholders ($8.00 per share)		-			-			-			(1,393,812)			-			(1,393,812)			-			(1,393,812)
Other comprehensive income (Note 2)		-			-			-			-			20,042			20,042			-			20,042
Balances at December 31, 2017	$	4,025,000		$	17,385		$	5,648,399		$	(675,711)		$	(75,064)		$	8,940,009		$	24,360		$	8,964,369
Issuance of common shares in connection with
share-based compensation (277,511 shares) (Note 10)		-			28			12,497			-			-			12,525			-			12,525
Share-based compensation expense, net of cash
paid in lieu of common shares (Note 10)		-			-			57,589			-			-			57,589			-			57,589
Contributions by noncontrolling interests		-			-			-			-			-			-			1,720			1,720
Net income		-			-			-			1,717,223			-			1,717,223			-			1,717,223
Net income allocated to noncontrolling interests		-			-			-			(6,192)			-			(6,192)			6,192			-
Distributions to equity holders:
Preferred shares (Note 8)		-			-			-			(216,316)			-			(216,316)			-			(216,316)
Noncontrolling interests		-			-			-			-			-			-			(7,022)			(7,022)
Common shareholders and restricted share
unitholders ($8.00 per share)		-			-			-			(1,396,364)			-			(1,396,364)			-			(1,396,364)

See accompanying notes.

F-6

PUBLIC STORAGE

STATEMENTS OF EQUITY

(Amounts in thousands, except share and per share amounts)

													Accumulated			Total
	Cumulative												Other			Public Storage
	Preferred			Common			Paid-in			Accumulated			Comprehensive			Shareholders’			Noncontrolling			Total
	Shares			Shares			Capital			Deficit			Loss			Equity			Interests			Equity
Other comprehensive income (Note 2)		-			-			-			-			11,004			11,004			-			11,004
Balances at December 31, 2018	$	4,025,000		$	17,413		$	5,718,485		$	(577,360)		$	(64,060)		$	9,119,478		$	25,250		$	9,144,728
Issuance of 43,600 preferred shares (Note 8)		1,090,000			-			(30,844)			-			-			1,059,156			-			1,059,156
Redemption of 42,000 preferred shares (Note 8)		(1,050,000)			-			-			-			-			(1,050,000)			-			(1,050,000)
Issuance of common shares in connection with
share-based compensation (287,734 shares) (Note 10)		-			29			33,535			-			-			33,564			-			33,564
Share-based compensation expense, net of cash
paid in lieu of common shares (Note 10)		-			-			13,671			-			-			13,671			-			13,671
Acquisition of noncontrolling interests		-			-			(23,913)			-			-			(23,913)			(11,087)			(35,000)
Contributions by noncontrolling interests		-			-			-			-			-			-			4,148			4,148
Net income		-			-			-			1,525,651			-			1,525,651			-			1,525,651
Net income allocated to noncontrolling interests		-			-			-			(5,117)			-			(5,117)			5,117			-
Distributions to:
Preferred shareholders (Note 8)		-			-			-			(210,179)			-			(210,179)			-			(210,179)
Noncontrolling interests		-			-			-			-			-			-			(6,672)			(6,672)
Common shareholders and restricted share
unitholders ($8.00 per share)		-			-			-			(1,398,570)			-			(1,398,570)			-			(1,398,570)
Other comprehensive loss (Note 2)		-			-			-			-			(830)			(830)			-			(830)
Balances at December 31, 2019	$	4,065,000		$	17,442		$	5,710,934		$	(665,575)		$	(64,890)		$	9,062,911		$	16,756		$	9,079,667

See accompanying notes.

F-7

PUBLIC STORAGE

STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	For the Years Ended December 31,
	2019			2018			2017
Cash flows from operating activities:
Net income	$	1,525,651		$	1,717,223		$	1,448,465
Adjustments to reconcile net income to net cash flows
from operating activities:
Gain due to Shurgard public offering		-			(151,616)			-
Gain on real estate investment sales		(341)			(37,903)			(1,421)
Assets damaged due to hurricanes		-			-			3,286
Depreciation and amortization		512,918			483,646			454,526
Equity in earnings of unconsolidated real estate entities		(69,547)			(103,495)			(75,655)
Distributions from retained earnings of unconsolidated
real estate entities		73,259			109,754			53,749
Foreign currency exchange (gain) loss		(7,829)			(18,117)			50,045
Share-based compensation expense		25,833			69,936			37,548
Other		7,699			(5,791)			2,346
Total adjustments		541,992			346,414			524,424
Net cash flows from operating activities		2,067,643			2,063,637			1,972,889
Cash flows from investing activities:
Payments for capital expenditures to maintain real estate facilities for:
Costs incurred during the period		(175,981)			(127,966)			(111,631)
Costs incurred in previous periods		(11,331)			(13,005)			(8,964)
Payments for development and expansion of real estate facilities for:
Costs incurred during the period		(203,331)			(281,240)			(289,238)
Costs incurred in previous periods		(81,351)			(58,792)			(48,055)
Acquisition of real estate facilities and intangible assets		(437,758)			(181,020)			(285,279)
Distributions in excess of retained earnings from
unconsolidated real estate entities		11,630			91,927			-
Proceeds from sale of real estate investments		762			54,184			6,103
Net cash flows used in investing activities		(897,360)			(515,912)			(737,064)
Cash flows from financing activities:
Repayments on notes payable		(1,920)			(1,784)			(1,701)
Issuance of notes payable, net of issuance costs		496,900			-			992,077
Issuance of preferred shares		1,059,156			-			561,177
Issuance of common shares		33,564			12,525			42,500
Redemption of preferred shares		(1,050,000)			-			(922,500)
Cash paid upon vesting of restricted share units		(12,162)			(12,347)			(14,092)
Acquisition of noncontrolling interests		(35,000)			-			(14,425)
Contributions by noncontrolling interests		4,148			1,720			2,484
Distributions paid to preferred shareholders,
common shareholders and restricted share unitholders		(1,608,749)			(1,612,680)			(1,630,347)
Distributions paid to noncontrolling interests		(6,672)			(7,022)			(7,392)
Net cash flows used in financing activities		(1,120,735)			(1,619,588)			(992,219)
Net cash flows from operating, investing, and financing activities		49,548			(71,863)			243,606
Net effect of foreign exchange translation		(13)			(171)			(126)
Increase (decrease) in cash and equivalents, including restricted cash	$	49,535		$	(72,034)		$	243,480

See accompanying notes.

F-8

PUBLIC STORAGE

STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	For the Years Ended December 31,
	2019			2018			2017
Cash and equivalents, including restricted cash at beginning of the period:
Cash and equivalents	$	361,218		$	433,376		$	183,688
Restricted cash included in other assets		22,801			22,677			28,885
	$	384,019		$	456,053		$	212,573
Cash and equivalents, including restricted cash at end of the period:
Cash and equivalents	$	409,743		$	361,218		$	433,376
Restricted cash included in other assets		23,811			22,801			22,677
	$	433,554		$	384,019		$	456,053
Supplemental schedule of non-cash investing and
financing activities:
Costs incurred during the period remaining unpaid at period end for:
Capital expenditures to maintain real estate facilities	$	(16,558)		$	(11,431)		$	(13,149)
Construction or expansion of real estate facilities		(32,356)			(81,157)			(60,474)
Accrued and other liabilities		48,914			92,588			73,623
Real estate acquired in exchange for assumption of notes payable		(1,817)			-			-
Notes payable assumed in connection with acquisition of real estate		1,817			-			-
Reclassification of existing investment to real estate in connection
with property acquisition (Note 3):
Real estate facilities		-			-			(6,310)
Investments in unconsolidated real estate entities		-			-			6,310
Other disclosures:
Foreign currency translation adjustment:
Real estate facilities, net of accumulated depreciation	$	-		$	203		$	(659)
Investments in unconsolidated real estate entities		830			15,997			(19,370)
Notes payable		(7,842)			(18,285)			49,906
Accumulated other comprehensive gain (loss)		6,999			1,914			(30,003)

See accompanying notes.

F-9

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

1.Description of the Business

Public Storage (referred to herein as “the Company,” “we,” “us,” or “our”), a Maryland real estate investment trust (“REIT”), was organized in 1980. Our principal business activities include the ownership and operation of self-storage facilities which offer storage spaces for lease, generally on a month-to-month basis, for personal and business use, ancillary activities such as merchandise sales and tenant reinsurance to the tenants at our self-storage facilities, as well as the acquisition and development of additional self-storage space.

At December 31, 2019, we have direct and indirect equity interests in 2,483 self-storage facilities (with approximately 169 million net rentable square feet) located in 38 states in the United States (“U.S.”) operating under the “Public Storage” name, and 0.9 million net rentable square feet of commercial and retail space.

We own 31.3 million common shares (an approximate 35% interest) of Shurgard Self Storage SA (“Shurgard”) a public company traded on Euronext Brussels under the “SHUR” symbol, which owns 234 self-storage facilities (with approximately 13 million net rentable square feet) located in seven Western European countries, all operating under the “Shurgard” name. We also own an aggregate approximate 42% common equity interest in PS Business Parks, Inc. (“PSB”), a REIT traded on the New York Stock Exchange under the “PSB” symbol, which owns 27.6 million aggregate net rentable square feet of commercial properties, primarily multi-tenant industrial, flex, and office space, located in six states.

Disclosures of the number and square footage of facilities, as well as the number and coverage of tenant reinsurance policies (Note 13) are unaudited and outside the scope of our independent registered public accounting firm’s review of our financial statements in accordance with the standards of the Public Company Accounting Oversight Board (U.S.).

2.Summary of Significant Accounting Policies

Basis of Presentation

The financial statements are presented on an accrual basis in accordance with U.S. generally accepted accounting principles (“GAAP”) as defined in the Financial Accounting Standards Board Accounting Standards Codification (the “Codification”).

Certain amounts previously reported in our December 31, 2018 and 2017 financial statements have been reclassified to conform to the December 31, 2019 presentation, including separate presentation on our Statements of Cash Flows of our cash payments for real estate investments between cash paid for amounts incurred during the current period and amounts incurred during previous periods.

Consolidation and Equity Method of Accounting

We consider entities to be Variable Interest Entities (“VIEs”) when they have insufficient equity to finance their activities without additional subordinated financial support provided by other parties, or the equity holders as a group do not have a controlling financial interest. We consolidate VIEs when we have (i) the power to direct the activities most significantly impacting economic performance, and (ii) either the obligation to absorb losses or the right to receive benefits from the VIE. We have no involvement with any material VIEs. We consolidate all other entities when we control them through voting shares or contractual rights. The entities we consolidate, for the period in which the reference applies, are referred to collectively as the “Subsidiaries,” and we eliminate intercompany transactions and balances.

F-10

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

We account for our investments in entities that we do not consolidate but have significant influence over using the equity method of accounting. These entities, for the periods in which the reference applies, are referred to collectively as the “Unconsolidated Real Estate Entities,” eliminating intra-entity profits and losses and amortizing any differences between the cost of our investment and the underlying equity in net assets against equity in earnings as if the Unconsolidated Real Estate Entity were a consolidated subsidiary. Equity in earnings of unconsolidated real estate entities represents our pro-rata share of the earnings of the Unconsolidated Real Estate Entities.

When we begin consolidating an entity, we reflect our preexisting equity interest at book value. All changes in consolidation status are reflected prospectively.

Collectively, at December 31, 2019, the Company and the Subsidiaries own 2,483 self-storage facilities and four commercial facilities in the U.S. At December 31, 2019, the Unconsolidated Real Estate Entities are comprised of PSB and Shurgard.

Use of Estimates

The financial statements and accompanying notes reflect our estimates and assumptions. Actual results could differ from those estimates and assumptions.

Income Taxes

We have elected to be treated as a REIT, as defined in the Internal Revenue Code of 1986, as amended (the “Code”). As a REIT, we do not incur federal income tax if we distribute 100% of our REIT taxable income each year, and if we meet certain organizational and operational rules. We believe we have met these REIT requirements for all periods presented herein. Accordingly, we have recorded no federal income tax expense related to our REIT taxable income.

Our merchandise and tenant reinsurance operations are subject to corporate income tax and such taxes are included in ancillary cost of operations. We also incur income and other taxes in certain states, which are included in general and administrative expense.

We recognize tax benefits of uncertain income tax positions that are subject to audit only if we believe it is more likely than not that the position would ultimately be sustained assuming the relevant taxing authorities had full knowledge of the relevant facts and circumstances of our positions. As of December 31, 2019, we had no tax benefits that were not recognized.

Real Estate Facilities

Real estate facilities are recorded at cost. We capitalize all costs incurred to acquire, develop, construct, renovate and improve facilities, including interest and property taxes incurred during the construction period. We allocate the net acquisition cost of acquired real estate facilities to the underlying land, buildings, and identified intangible assets based upon their respective individual estimated fair values.

Costs associated with dispositions of real estate, as well as repairs and maintenance costs, are expensed as incurred. We depreciate buildings and improvements on a straight-line basis over estimated useful lives ranging generally between 5 to 25 years.

When we sell a full or partial interest in a real estate facility without retaining a controlling interest following sale, we recognize a gain or loss on sale as if 100% of the property was sold at fair value. If we retain

F-11

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

a controlling interest following the sale, we record a noncontrolling interest for the book value of the partial interest sold, and recognize additional paid-in capital for the difference between the consideration received and the partial interest at book value.

Other Assets

Other assets primarily consist of rents receivable from our tenants, prepaid expenses, restricted cash and right-to-use assets (Note 12).

Accrued and Other Liabilities

Accrued and other liabilities consist primarily of rents prepaid by our tenants, trade payables, property tax accruals, accrued payroll, accrued tenant reinsurance losses, lease liabilities (Note 12), and contingent loss accruals when probable and estimable. We believe the fair value of our accrued and other liabilities approximates book value, due primarily to the short period until repayment. We disclose the nature of significant unaccrued losses that are reasonably possible of occurring and, if estimable, a range of exposure.

Cash Equivalents, Restricted Cash, Marketable Securities and Other Financial Instruments

Cash equivalents represent highly liquid financial instruments such as money market funds with daily liquidity or short-term commercial paper or treasury securities maturing within three months of acquisition. Cash and equivalents which are restricted from general corporate use are included in other assets. We believe that the book value of all such financial instruments for all periods presented approximates fair value, due to the short period to maturity.

Fair Value

As used herein, the term “fair value” is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Our estimates of fair value involve considerable judgment and are not necessarily indicative of the amounts that could be realized in current market exchanges.

We estimate the fair value of our cash and equivalents, marketable securities, other assets, debt, and other liabilities by discounting the related future cash flows at a rate based upon quoted interest rates for securities that have similar characteristics such as credit quality and time to maturity. Such quoted interest rates are referred to generally as “Level 2” inputs.

We use significant judgment to estimate fair values of investments in real estate, goodwill, and other intangible assets. In estimating their values, we consider significant unobservable inputs such as market prices of land, market capitalization rates, expected returns, earnings multiples, projected levels of earnings, costs of construction, and functional depreciation. These inputs are referred to generally as “Level 3” inputs.

Currency and Credit Risk

Financial instruments that are exposed to credit risk consist primarily of cash and equivalents, certain portions of other assets including rents receivable from our tenants and restricted cash. Cash equivalents we invest in are either money market funds with a rating of at least AAA by Standard & Poor’s, commercial paper that is rated A1 by Standard & Poor’s or deposits with highly rated commercial banks.

F-12

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

At December 31, 2019, due primarily to our investment in Shurgard (Note 4) and our notes payable denominated in Euros (Note 6), our operating results and financial position are affected by fluctuations in currency exchange rates between the Euro, and to a lesser extent, other European currencies, against the U.S. Dollar.

Goodwill and Other Intangible Assets

Intangible assets are comprised of goodwill, the “Shurgard” trade name and acquired customers in place.

Goodwill totaled $174.6 million at December 31, 2019 and 2018. The “Shurgard” trade name, which is used by Shurgard pursuant to a fee-based licensing agreement, has a book value of $18.8 million at December 31, 2019 and 2018. Goodwill and the “Shurgard” trade name have indefinite lives and are not amortized.

Our finite-lived assets are comprised primarily of acquired customers in place and are amortized relative to the benefit of the customers in place to each period. At December 31, 2019, these intangibles had a net book value of $12.5 million ($16.5 million at December 31, 2018). Accumulated amortization totaled $27.5 million at December 31, 2019 ($29.6 million at December 31, 2018), and amortization expense of $16.8 million, $16.6 million and $15.0 million was recorded in 2019, 2018 and 2017, respectively. The estimated future amortization expense for our finite-lived intangible assets at December 31, 2019 is approximately $10.8 million in 2020, $1.3 million in 2021 and $0.4 million thereafter. During 2019, 2018 and 2017, intangibles increased $18.5 million, $11.6 million and $17.2 million, respectively, in connection with the acquisition of self-storage facilities (Note 3).

Evaluation of Asset Impairment

We evaluate our real estate and finite-lived intangible assets for impairment each quarter. If there are indicators of impairment and we determine that the asset is not recoverable from future undiscounted cash flows to be received through the asset’s remaining life (or, if earlier, the expected disposal date), we record an impairment charge to the extent the carrying amount exceeds the asset’s estimated fair value or net proceeds from expected disposal.

We evaluate our investments in unconsolidated real estate entities for impairment on a quarterly basis. We record an impairment charge to the extent the carrying amount exceeds estimated fair value, when we believe any such shortfall is other than temporary.

We evaluate goodwill for impairment annually and whenever relevant events, circumstances and other related factors indicate that fair value of the related reporting unit may be less than the carrying amount. If we determine that the fair value of the reporting unit exceeds the aggregate carrying amount, no impairment charge is recorded. Otherwise, we record an impairment charge to the extent the carrying amount of the goodwill exceeds the amount that would be allocated to goodwill if the reporting unit were acquired for estimated fair value.

We evaluate other indefinite-lived intangible assets, such as the “Shurgard” trade name for impairment at least annually and whenever relevant events, circumstances and other related factors indicate that the fair value is less than the carrying amount. When we conclude that it is likely that the asset is not impaired, we do not record an impairment charge and no further analysis is performed. Otherwise, we record an impairment charge to the extent the carrying amount exceeds the asset’s estimated fair value.

No impairments were recorded in any of our evaluations for any period presented herein.

F-13

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

Casualty Loss

We record casualty losses for a) the book value of assets destroyed and b) incremental repair, clean-up, and other costs associated with the casualty. Insurance proceeds are recorded as a reduction in casualty loss when all uncertainties of collection are satisfied. During 2017, we incurred casualty losses totaling $7.8 million, comprised of $3.3 million in book value of assets damaged and $4.5 million in repairs and maintenance incurred in connection with Hurricanes Harvey and Irma.

Revenue and Expense Recognition

Revenues from self-storage facilities, which are primarily composed of rental income earned pursuant to month-to-month leases, as well as associated late charges and administrative fees, are recognized as earned. Promotional discounts reduce rental income over the promotional period, which is generally one month. Ancillary revenues and interest and other income are recognized when earned.

We accrue for property tax expense based upon actual amounts billed and, in some circumstances, estimates when bills or assessments have not been received from the taxing authorities. If these estimates are incorrect, the timing and amount of expense recognition could be incorrect. Cost of operations (including advertising expenditures), general and administrative expense, and interest expense are expensed as incurred.

Foreign Currency Exchange Translation

The local currency (primarily the Euro) is the functional currency for our interests in foreign operations. The related balance sheet amounts are translated into U.S. Dollars at the exchange rates at the respective financial statement date, while amounts on our statements of income are translated at the average exchange rates during the respective period. When financial instruments denominated in a currency other than the U.S. Dollar are expected to be settled in cash in the foreseeable future, the impact of changes in the U.S. Dollar equivalent are reflected in current earnings. The Euro was translated at exchange rates of approximately 1.122 U.S. Dollars per Euro at December 31, 2019 (1.144 at December 31, 2018), and average exchange rates of 1.120, 1.181 and 1.129 for the years ended December 31, 2019, 2018 and 2017, respectively. Cumulative translation adjustments, to the extent not included in cumulative net income, are included in equity as a component of accumulated other comprehensive income (loss).

Comprehensive Income

Total comprehensive income represents net income, adjusted for changes in other comprehensive income (loss) for the applicable period. The aggregate foreign currency exchange gains and losses reflected on our statements of comprehensive income are comprised primarily of foreign currency exchange gains and losses on our investment in Shurgard and our unsecured notes denominated in Euros.

Net Income per Common Share

Net income is allocated to (i) noncontrolling interests based upon their share of the net income of the Subsidiaries, (ii) preferred shareholders, to the extent redemption cost exceeds the related original net issuance proceeds (an “EITF D-42 allocation”), and (iii) the remaining net income is allocated to each of our equity securities based upon the dividends declared or accumulated during the period, combined with participation rights in undistributed earnings.

Basic and diluted net income per common share are each calculated based upon net income allocable to common shareholders presented on the face of our income statement, divided by (i) in the case of basic net income per common share, weighted average common shares, and (ii) in the case of diluted income per common share,

F-14

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

weighted average common shares adjusted for the impact, if dilutive, of stock options outstanding (Note 10). The following table reconciles from basic to diluted common shares outstanding (amounts in thousands):

		For the Years Ended December 31,
		2019			2018				2017
	Weighted average common shares and equivalents
	outstanding:
	Basic weighted average common
	shares outstanding		174,287			173,969			173,613
	Net effect of dilutive stock options -
	based on treasury stock method		243			328			538
	Diluted weighted average common
	shares outstanding		174,530			174,297			174,151

3.Real Estate Facilities

Activity in real estate facilities during 2019, 2018 and 2017 is as follows:

		For the Years Ended December 31,
		2019			2018			2017
		(Amounts in thousands)
	Operating facilities, at cost:
	Beginning balance	$	15,296,844		$	14,665,989		$	13,963,229
	Costs incurred for capital expenditures to maintain
	real estate facilities		192,539			139,397			124,780
	Acquisitions		421,097			169,436			274,115
	Dispositions		(426)			(25,633)			(1,092)
	Hurricane damage		-			-			(8,226)
	Developed or expanded facilities opened for operation		379,092			348,270			311,559
	Impact of foreign exchange rate changes		-			(615)			1,624
	Ending balance		16,289,146			15,296,844			14,665,989
	Accumulated depreciation:
	Beginning balance		(6,140,072)			(5,700,331)			(5,270,963)
	Depreciation expense		(483,408)			(457,029)			(433,466)
	Dispositions		5			16,876			123
	Hurricane damage		-			-			4,940
	Impact of foreign exchange rate changes		-			412			(965)
	Ending balance		(6,623,475)			(6,140,072)			(5,700,331)
	Construction in process:
	Beginning balance		285,339			264,441			230,310
	Costs incurred for development and expansion
	of real estate facilities		235,687			362,397			349,712
	Developed or expanded facilities opened for operation		(379,092)			(348,270)			(311,559)
	Dispositions		-			(2,698)			(4,022)
	Transfer from other assets		-			9,469			-
	Ending balance		141,934			285,339			264,441
	Total real estate facilities at December 31,	$	9,807,605		$	9,442,111		$	9,230,099

F-15

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

During 2019, we acquired 44 self-storage facilities and one commercial facility (3,133,000 net rentable square feet of storage space and 46,000 net rentable square feet of commercial space), for a total cost of $439.6 million, consisting of $437.8 million in cash and the assumption of $1.8 million in mortgage notes. Approximately $18.5 million of the total cost was allocated to intangible assets. We completed development and redevelopment activities costing $379.1 million during 2019, adding 3.7 million net rentable square feet of self-storage space. Construction in process at December 31, 2019 consists of projects to develop new self-storage facilities and expand existing self-storage facilities.

During 2019, we paid a total of $284.7 million with respect to the development and expansion of real estate facilities, including $81.4 million to repay amounts accrued at December 31, 2018. Of the $235.7 million in costs incurred during 2019, $32.4 million remains unpaid at December 31, 2019.

During 2019, we paid a total of $187.3 million with respect to capital expenditures to maintain real estate facilities, including $11.3 million to repay amounts accrued at December 31, 2018. Of the $192.5 million in costs incurred during 2019, $16.6 million remains unpaid at December 31, 2019.

During 2018, we acquired 25 self-storage facilities (1.6 million net rentable square feet), for a total cost of $181.0 million in cash, of which $11.6 million was allocated to intangible assets. We completed development and redevelopment activities costing $348.3 million during 2018, adding 3.0 million net rentable square feet of self-storage space. Construction in process at December 31, 2018 consists of projects to develop new self-storage facilities and redevelop existing self-storage facilities. On October 18, 2018, we sold our property in West London to Shurgard for $42.1 million and recorded a related gain on sale of real estate of approximately $31.5 million. This gain was net of the recognition of a cumulative other comprehensive loss totaling $4.8 million with respect to foreign currency translation. On October 25, 2018, we sold a commercial facility for $8.7 million and recorded a related gain on sale of real estate of approximately $4.6 million. During 2018, we also sold portions of real estate facilities in connection with eminent domain proceedings for $3.4 million in cash proceeds and recorded a related gain on sale of real estate of approximately $1.8 million. During 2018, we also transferred $9.5 million of accumulated construction costs from other assets to construction in process.

During 2018, we paid a total of $340.0 million with respect to the development and expansion of real estate facilities, including $58.8 million to repay amounts accrued at December 31, 2017. Of the $362.4 million in costs incurred during 2018, $81.2 million remained unpaid at December 31, 2018.

During 2018, we paid a total of $141.0 million with respect to capital expenditures to maintain real estate facilities, including $13.0 million to repay amounts accrued at December 31, 2017. Of the $139.4 million in costs incurred during 2018, $11.4 million remained unpaid at December 31, 2018.

During 2017, we acquired 22 self-storage facilities from third parties (1,365,000 net rentable square feet), for a total cost of $149.8 million, in cash. Approximately $8.2 million of the total cost was allocated to intangible assets. On December 31, 2017, we acquired the remaining 74.25% of the interests which we did not own in one of the unconsolidated entities that owned 12 self-storage facilities (749,000 net rentable square feet) for a total cost of $135.5 million in cash. Approximately $9.0 million of the $141.8 million acquisition cost (which includes the $6.3 million book value of our existing investment) was allocated to intangible assets and $0.3 million was allocated to other assets.

We completed development and redevelopment activities during 2017, adding 2.7 million net rentable square feet of self-storage space, at an aggregate cost of $311.6 million. During 2017, we sold real estate for a total of approximately $6.4 million in cash proceeds, of which $0.3 million was collected in 2016, and recorded a related gain on real estate investment sales of approximately $1.4 million in 2017.

F-16

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

During 2017, we paid a total of $337.3 million with respect to the development and expansion of real estate facilities, including $48.1 million to repay amounts accrued at December 31, 2016. Of the $349.7 million in costs incurred during 2017, $60.5 million remained unpaid at December 31, 2017.

During 2017, we paid a total of $120.6 million with respect to capital expenditures to maintain real estate facilities, including $9.0 million to repay amounts accrued at December 31, 2016. Of the $124.8 million in costs incurred during 2017, $13.1 million remained unpaid at December 31, 2017.

At December 31, 2019, the adjusted basis of real estate facilities for U.S. federal tax purposes was approximately $10.6 billion (unaudited).

4.Investments in Unconsolidated Real Estate Entities

The following table sets forth our investments in, and equity in earnings of, the Unconsolidated Real Estate Entities (amounts in thousands):

		Investments in Unconsolidated Real Estate						Equity in Earnings of Unconsolidated Real Estate
		Entities at December 31,						Entities for the Year Ended December 31,
		2019			2018			2019			2018			2017
	PSB	$	427,875		$	434,533		$	54,090		$	89,362		$	46,544
	Shurgard		339,941			349,455			15,457			14,133			25,948
	Other Investments		-			-			-			-			3,163
	Total	$	767,816		$	783,988		$	69,547		$	103,495		$	75,655

Investment in PSB

Throughout all periods presented, we owned 7,158,354 shares of PSB’s common stock and 7,305,355 limited partnership units in an operating partnership controlled by PSB, representing an aggregate approximately 42% common equity interest. The limited partnership units are convertible at our option, subject to certain conditions, on a one-for-one basis into PSB common stock.

Based upon the closing price at December 31, 2019 ($164.87 per share of PSB common stock), the shares and units we owned had a market value of approximately $2.4 billion.

Our equity in earnings of PSB is comprised of our equity share of PSB’s net income, less amortization of the PSB Basis Differential (defined below).

During 2019, 2018, and 2017, we received cash distributions from PSB totaling $60.7 million, $55.0 million, and $49.2 million, respectively.

At December 31, 2019, our pro-rata investment in PSB’s real estate assets included in investment in unconsolidated real estate entities exceeds our pro-rata share of the underlying amounts on PSB’s balance sheet by approximately $4.2 million ($7.4 million at December 31, 2018). This differential (the “PSB Basis Differential”) is being amortized as a reduction to equity in earnings of the Unconsolidated Real Estate Entities. Such amortization totaled approximately $3.2 million, $1.8 million, and $1.3 million during 2019, 2018, and 2017, respectively.

PSB is a publicly held entity traded on the New York Stock Exchange under the symbol “PSB”.

F-17

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

Investment in Shurgard

Throughout all periods presented, we effectively owned, directly and indirectly 31,268,459 Shurgard common shares. On October 15, 2018, Shurgard completed an initial global offering (the “Offering”), issuing 25.0 million of its common shares to third parties at a price of €23 per share, reducing our ownership interest to approximately 35%. Following the Offering, Shurgard’s shares trade on Euronext Brussels under the “SHUR” symbol. We recorded a “Gain due to Shurgard public offering” of $151.6 million, as if we had sold a proportionate share of our investment in Shurgard. The gain resulted in a $174.0 million increase in our investment in Shurgard and a $22.4 million reduction in other comprehensive loss with respect to cumulative foreign currency translation losses for Shurgard.

Based upon the closing price at December 31, 2019 (€34.00 per share of SHUR common stock, at 1.122 exchange rate of US Dollars to the Euro), the shares we owned had a market value of approximately $1.2 billion.

Our equity in earnings of Shurgard is comprised of our equity share of Shurgard’s net income, plus $1.0 million, $1.3 million, and $1.3 million for 2019, 2018 and 2017, respectively, representing our equity share of the trademark license fees that Shurgard pays to us for the use of the “Shurgard” trademark. The remaining license fees we receive from Shurgard are classified as interest and other income on our income statement.

The dividends we receive from Shurgard, combined with our equity share of trademark license fees collected from Shurgard, are reflected on our statements of cash flows as “distributions from retained earnings of unconsolidated real estate entities” to the extent of our cumulative earnings, with any excess classified as “distributions in excess of retained earnings from unconsolidated real estate entities.” Shurgard paid €0.67 per share in dividends to its shareholders during 2019, of which our share totaled $23.1 million. During 2018, Shurgard paid a cash dividend to its shareholders at the time, of which our equity share was $145.4 million.

Changes in foreign currency exchange rates decreased our investment in Shurgard by approximately $0.8 million and $16.0 million in 2019 and 2018, respectively, and increased it by approximately $19.4 million in 2017.

Shurgard is a publicly held entity trading on Euronext Brussels under the symbol “SHUR”.

Other Investments

On December 31, 2017, we acquired the remaining 74.25% equity interest we did not own in a legacy institutional partnership (the “Other Investments”) for $135.5 million, in cash, and began to consolidate the 12 self-storage facilities owned by the Other Investments.

5.Credit Facility

We have a revolving credit agreement (the “Credit Facility”) with a $500 million borrowing limit, which was amended on April 19, 2019 to (i) extend the maturity date from March 31, 2020 to April 19, 2024, (ii) decrease the current effective borrowing spread over LIBOR from 0.850% to 0.70%, and (iii) decrease the current effective facility fee from 0.080% to 0.070%. All other terms remained substantially the same. Amounts drawn on the Credit Facility bear annual interest at rates ranging from LIBOR plus 0.70% to LIBOR plus 1.350% depending upon the ratio of our Total Indebtedness to Gross Asset Value (as defined in the Credit Facility) (LIBOR plus 0.70% at December 31, 2019). We are also required to pay a quarterly facility fee ranging from 0.070% per annum to 0.250% per annum depending upon the ratio of our Total Indebtedness to our Gross Asset Value (0.070% per annum at December 31, 2019). At December 31, 2019 and February 25, 2019, we had no outstanding borrowings under this Credit Facility. We had undrawn standby letters of credit, which reduce our

F-18

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

borrowing capacity, totaling $15.9 million at December 31, 2019 ($16.2 million at December 31, 2018). The Credit Facility has various customary restrictive covenants, all of which we were in compliance with at December 31, 2019.

6.Notes Payable

Our notes payable at December 31, 2019 and 2018 are set forth in the table below:

					Amounts at December 31, 2019
	Coupon		Effective					Unamortized				Book			Fair
	Rate		Rate			Principal		Costs				Value			Value
					($ amounts in thousands)
U.S. Dollar Denominated Unsecured Debt
Notes due September 15, 2022	2.370%		2.483%		$	500,000		$	(1,419)		$	498,581		$	505,639
Notes due September 15, 2027	3.094%		3.218%			500,000			(4,076)			495,924			520,694
Notes due May 1, 2029	3.385%		3.459%			500,000			(2,876)			497,124			531,911
						1,500,000			(8,371)			1,491,629			1,558,244
Euro Denominated Unsecured Debt
Notes due April 12, 2024	1.540%		1.540%			112,156			-			112,156			115,932
Notes due November 3, 2025	2.175%		2.175%			271,433			-			271,433			298,398
						383,589			-			383,589			414,330
Mortgage Debt, secured by 27
real estate facilities with a net
book value of $105.7 million	4.025%		3.995%			27,275			-			27,275			28,506
					$	1,910,864		$	(8,371)		$	1,902,493		$	2,001,080

											Amounts at
											December 31, 2018
												Book			Fair
												Value			Value
											($ amounts in thousands)
U.S. Dollar Denominated Unsecured Debt
Notes due September 15, 2022											$	498,053		$	482,017
Notes due September 15, 2027												495,396			469,055
Notes due May 1, 2029												-			-
												993,449			951,072
Euro Denominated Unsecured Debt
Notes due April 12, 2024												114,449			115,964
Notes due November 3, 2025												276,982			286,078
												391,431			402,042
Mortgage Debt												27,403			27,613
											$	1,412,283		$	1,380,727

F-19

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

U.S. Dollar Denominated Unsecured Notes

On September 18, 2017, we issued, in a public offering, two tranches each totaling $500.0 million of U.S. Dollar denominated unsecured notes. In connection with the offering, we incurred a total of $7.9 million in costs, which is reflected as a reduction in the principal amount and amortized, using the effective interest method, over the term of each respective note. Interest on such notes is payable semi-annually on March 15 and September 15 of each year, commencing March 15, 2018.

On April 12, 2019, we completed a public offering of $500 million in aggregate principal amount of senior notes bearing interest at an annual rate of 3.385% maturing on May 1, 2029. In connection with the offering, we incurred a total of $3.1 million in costs. The notes issued on April 12, 2019 and on September 18, 2017 are referred to hereinafter as the “U.S. Dollar Notes.”

The U.S. Dollar Notes have various financial covenants, all of which we were in compliance with at December 31, 2019. Included in these covenants are (a) a maximum Debt to Total Assets of 65% (approximately 5% at December 31, 2019) and (b) a minimum ratio of Adjusted EBITDA to Interest Expense of 1.5x (approximately 47x for the twelve months ended December 31, 2019) as well as covenants limiting the amount we can encumber our properties with mortgage debt.

Euro Denominated Unsecured Notes

Our euro denominated unsecured notes (the “Euro Notes”) are payable to institutional investors. The Euro Notes consist of two tranches, (i) €242.0 million issued on November 3, 2015 for $264.3 million in net proceeds upon converting the Euros to U.S. Dollars and (ii) €100.0 million issued on April 12, 2016 for $113.6 million in net proceeds upon converting the Euros to U.S. Dollars. Interest is payable semi-annually. The Euro Notes have various customary financial covenants, all of which we were in compliance with at December 31, 2019.

We reflect changes in the U.S. Dollar equivalent of the amount payable, as a result of changes in foreign exchange rates as “foreign currency exchange gain (loss)” on our income statement (gains of $7.8 million and $18.1 million for 2019 and 2018, respectively, as compared to a loss of $50.0 million for 2017).

Mortgage Notes

Our non-recourse mortgage debt was assumed in connection with property acquisitions, and recorded at fair value with any premium or discount to the stated note balance amortized using the effective interest method.

During 2019, we assumed a mortgage note with a contractual value of $1.8 million and an interest rate of 3.9%, which approximated market rate, in connection with the acquisition of a real estate facility.

At December 31, 2019, the related contractual interest rates are fixed, ranging between 3.2% and 7.1%, and mature between January 1, 2022 and July 1, 2030.

At December 31, 2019, approximate principal maturities of our Notes Payable are as follows (amounts in thousands):

F-20

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

	Unsecured			Mortgage
	Debt			Debt			Total
2020	$	-		$	2,015		$	2,015
2021		-			1,871			1,871
2022		500,000			2,584			502,584
2023		-			19,219			19,219
2024		112,156			124			112,280
Thereafter		1,271,433			1,462			1,272,895
	$	1,883,589		$	27,275		$	1,910,864
Weighted average effective rate		2.8%			4.0%			2.9%

Cash paid for interest totaled $48.3 million, $36.3 million and $16.8 million for 2019, 2018 and 2017, respectively. Interest capitalized as real estate totaled $3.9 million, $4.8 million and $4.4 million for 2019, 2018 and 2017, respectively.

7.Noncontrolling Interests

At December 31, 2019, the noncontrolling interests represent (i) third-party equity interests in subsidiaries owning 18 operating self-storage facilities and seven self-storage facilities that are under construction and (ii) 231,978 partnership units held by third-parties in a subsidiary that are convertible on a one-for-one basis (subject to certain limitations) into common shares of the Company at the option of the unitholder (collectively, the “Noncontrolling Interests”). At December 31, 2019, the Noncontrolling Interests cannot require us to redeem their interests, other than pursuant to a liquidation of the subsidiary.

During 2019, 2018 and 2017, we allocated a total of $5.1 million, $6.2 million and $6.2 million, respectively, of income to these interests; and we paid $6.7 million, $7.0 million and $7.4 million, respectively, in distributions to these interests.

During 2019, we acquired noncontrolling interests for an aggregate of $35.0 million (none for 2018) in cash, of which $11.1 million was allocated to Noncontrolling Interests, with the remainder allocated to Paid-in Capital. During 2017, we acquired Noncontrolling Interests for $14.4 million in cash, of which $7.7 million was allocated to Paid-in capital and $6.7 million as a reduction to Noncontrolling Interests. During 2019, 2018 and 2017, Noncontrolling Interests contributed $4.1 million, $1.7 million and $2.5 million, respectively, to our subsidiaries.

8.Shareholders’ Equity

Preferred Shares

At December 31, 2019 and 2018, we had the following series of Cumulative Preferred Shares (“Preferred Shares”) outstanding:

F-21

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

							At December 31, 2019					At December 31, 2018
	Series		Earliest Redemption Date		Dividend Rate		Shares Outstanding		Liquidation Preference			Shares Outstanding		Liquidation Preference
							(Dollar amounts in thousands)
	Series U		6/15/2017		5.625%		-		$	-		11,500		$	287,500
	Series V		9/20/2017		5.375%		19,800			495,000		19,800			495,000
	Series W		1/16/2018		5.200%		20,000			500,000		20,000			500,000
	Series X		3/13/2018		5.200%		9,000			225,000		9,000			225,000
	Series Y		3/17/2019		6.375%		-			-		11,400			285,000
	Series Z		6/4/2019		6.000%		-			-		11,500			287,500
	Series A		12/2/2019		5.875%		-			-		7,600			190,000
	Series B		1/20/2021		5.400%		12,000			300,000		12,000			300,000
	Series C		5/17/2021		5.125%		8,000			200,000		8,000			200,000
	Series D		7/20/2021		4.950%		13,000			325,000		13,000			325,000
	Series E		10/14/2021		4.900%		14,000			350,000		14,000			350,000
	Series F		6/2/2022		5.150%		11,200			280,000		11,200			280,000
	Series G		8/9/2022		5.050%		12,000			300,000		12,000			300,000
	Series H		3/11/2024		5.600%		11,400			285,000		-			-
	Series I		9/12/2024		4.875%		12,650			316,250		-			-
	Series J		11/15/2024		4.700%		10,350			258,750		-			-
	Series K		12/20/2024		4.750%		9,200			230,000		-			-
	Total Preferred Shares						162,600		$	4,065,000		161,000		$	4,025,000

The holders of our Preferred Shares have general preference rights with respect to liquidation, quarterly distributions and any accumulated unpaid distributions. Except as noted below, holders of the Preferred Shares do not have voting rights. In the event of a cumulative arrearage equal to six quarterly dividends, holders of all outstanding series of preferred shares (voting as a single class without regard to series) will have the right to elect two additional members to serve on our board of trustees (our “Board”) until the arrearage has been cured. At December 31, 2019, there were no dividends in arrears. The affirmative vote of at least 66.67% of the outstanding shares of a series of Preferred Shares is required for any material and adverse amendment to the terms of such series. The affirmative vote of at least 66.67% of the outstanding shares of all of our Preferred Shares, voting as a single class, is required to issue shares ranking senior to our Preferred Shares.

Except under certain conditions relating to the Company’s qualification as a REIT, the Preferred Shares are not redeemable prior to the dates indicated on the table above. On or after the respective dates, each of the series of Preferred Shares is redeemable at our option, in whole or in part, at $25.00 per depositary share, plus accrued and unpaid dividends. Holders of the Preferred Shares cannot require us to redeem such shares.

Upon issuance of our Preferred Shares, we classify the liquidation value as preferred equity on our balance sheet with any issuance costs recorded as a reduction to Paid-in capital.

F-22

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

In 2019, we redeemed our Series U, Series Y, Series Z and Series A Preferred Shares, at par, for a total of $1.05 billion in cash, before payment of accrued dividends.

In 2019, we issued an aggregate 43.6 million depositary shares, each representing 0.001 of a share of our Series H, Series I, Series J and Series K Preferred Shares, at an issuance price of $25.00 per depositary share, for a total of $1.09 billion in gross proceeds, and we incurred $30.8 million in issuance costs.

In 2017, we redeemed our Series S and Series T Preferred Shares, at par, for a total of $922.5 million in cash, before payment of accrued dividends.

In 2017, we issued an aggregate 23.2 million depositary shares, each representing 0.001 of a share of our Series F and Series G Preferred Shares, at an issuance price of $25.00 per depositary share, for a total of $580.0 million in gross proceeds, and we incurred $18.8 million in issuance costs.

In 2019 and 2017, we recorded $32.7 million and $29.3 million, respectively, in EITF D-42 allocations of income from our common shareholders to the holders of our Preferred Shares in connection with redemptions of Preferred Shares.

Common Shares

During 2019, 2018 and 2017, activity with respect to the issuance of our common shares was as follows (dollar amounts in thousands):

		2019						2018						2017
			Shares			Amount			Shares			Amount			Shares			Amount
Employee stock-based compensation and
exercise of stock options (Note 10)			287,734		$	33,564			277,511		$	12,525			564,583		$	42,500

Our Board previously authorized the repurchase from time to time of up to 35.0 million of our common shares on the open market or in privately negotiated transactions. Through December 31, 2019, we repurchased approximately 23.7 million shares pursuant to this authorization; none of which were repurchased during the three years ended December 31, 2019.

At December 31, 2019 and 2018, we had 2,958,817 and 3,138,618, respectively, of common shares reserved in connection with our share-based incentive plans (see Note 10), and 231,978 shares reserved for the conversion of partnership units owned by Noncontrolling Interests.

The unaudited characterization of dividends for U.S. federal income tax purposes is made based upon earnings and profits of the Company, as defined by the Code. Common share dividends including amounts paid to our restricted share unitholders totaled $1.399 billion ($8.00 per share), $1.396 billion ($8.00 per share) and $1.394 billion ($8.00 per share) for the years ended December 31, 2019, 2018 and 2017, respectively. Preferred share dividends totaled $210.2 million, $216.3 million and $236.5 million for the years ended December 31, 2019, 2018 and 2017, respectively.

F-23

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

For the tax year ended December 31, 2019, distributions for the common shares and all the various series of preferred shares were classified as follows:

		2019 (unaudited)
			1st Quarter				2nd Quarter				3rd Quarter				4th Quarter
Ordinary Income			100.00	%			100.00	%			100.00	%			100.00	%
Long-Term Capital Gain			0.00	%			0.00	%			0.00	%			0.00	%
Total			100.00	%			100.00	%			100.00	%			100.00	%

The ordinary income dividends distributed for the tax year ended December 31, 2019 are not qualified dividends under the Internal Revenue Code, however, they are subject to the 20% deduction under IRS Section 199A.

9.Related Party Transactions

B. Wayne Hughes, our former Chairman and his family, including his daughter Tamara Hughes Gustavson and his son B. Wayne Hughes, Jr., who are both members of our Board, collectively own approximately 14.1% of our common shares outstanding at December 31, 2019.

At December 31, 2019, Tamara Hughes Gustavson owned and controlled 63 self-storage facilities in Canada. These facilities operate under the “Public Storage” tradename, which we license to the owners of these facilities for use in Canada on a royalty-free, non-exclusive basis. We have no ownership interest in these facilities and we do not own or operate any facilities in Canada. If we chose to acquire or develop our own facilities in Canada, we would have to share the use of the “Public Storage” name in Canada. We have a right of first refusal, subject to limitations, to acquire the stock or assets of the corporation engaged in the operation of these facilities if their owners agree to sell them. Our subsidiaries reinsure risks relating to loss of goods stored by customers in these facilities, and have received approximately $1.5 million, $1.3 million and $1.1 million for the years ended December 31, 2019, 2018 and 2017, respectively. Our right to continue receiving these premiums may be qualified.

10.Share-Based Compensation

Under various share-based compensation plans and under terms established by our Board or a committee thereof, we grant non-qualified options to purchase the Company’s common shares, as well as restricted share units (“RSUs”), to trustees, officers, and key employees.

Stock options and RSUs are considered “granted” and “outstanding” as the terms are used herein, when (i) the Company and the recipient reach a mutual understanding of the key terms of the award, (ii) the award has been authorized, (iii) the recipient is affected by changes in the market price of our stock, and (iv) it is probable that any performance conditions will be met.

We amortize the grant-date fair value of awards as compensation expense over the service period, which begins on the grant date and ends generally on the vesting date. For awards that are earned solely upon the passage of time and continued service, the entire cost of the award is amortized on a straight-line basis over the service period. For awards with performance conditions, the individual cost of each vesting is amortized separately over each individual service period (the “accelerated attribution” method).

F-24

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

The Codification previously stipulated that grants to nonemployee service providers (other than to trustees, where equity method treatment was permitted) were accounted for on the liability method, with expenses adjusted each period based upon changes in fair value. Recent changes in the Codification allows such grants to be accounted for on the equity award method, with compensation expense based upon grant date fair value. While we have no such grants to any such individuals for any periods presented, we will account for any future grants to nonemployee service providers based upon the equity award method.

In amortizing share-based compensation expense, we do not estimate future forfeitures in advance. Instead, we reverse previously amortized share-based compensation expense with respect to grants that are forfeited in the period the employee terminates employment.

In February 2018, we announced that our Chief Executive Officer and Chief Financial Officer at the time were retiring from their executive roles at the end of 2018 and would then serve only as Trustees of the Company. Pursuant to our share-based compensation plans, their unvested grants will continue to vest over the original vesting periods during their service as Trustees. For financial reporting, the end of the service periods for previous stock option and RSU grants for these executives changed from (i) the various vesting dates to (ii) December 31, 2018 when they retired. Accordingly, all remaining share-based compensation expense for these two executives was amortized in the year ended December 31, 2018.

See also “net income per common share” in Note 2 for further discussion regarding the impact of RSUs and stock options on our net income per common share and income allocated to common shareholders.

Stock Options

Stock options vest over 3 to 5 years, expire ten years after the grant date, and the exercise price is equal to the closing trading price of our common shares on the grant date. Employees cannot require the Company to settle their award in cash. We use the Black-Scholes option valuation model to estimate the fair value of our stock options.

Outstanding stock option grants are included on a one-for-one basis in our diluted weighted average shares, to the extent dilutive, after applying the treasury stock method (based upon the average common share price during the period) to assumed exercise proceeds and measured but unrecognized compensation.

The stock options outstanding at December 31, 2019 have an aggregate intrinsic value (the excess, if any, of each option’s market value over the exercise price) of approximately $38.6 million and remaining average contractual lives of approximately six years. The aggregate intrinsic value of exercisable stock options at December 31, 2019 amounted to approximately $35.6 million. Approximately 1,360,000 of the stock options outstanding at December 31, 2019, have an exercise price of more than $200. Included in our stock options exercisable at December 31, 2019, are 39,667 stock options which expire through June 30, 2021, with an average exercise price per share of $106.91.

Additional information with respect to stock options during 2019, 2018 and 2017 is as follows:

F-25

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

		2019						2018						2017
						Weighted						Weighted						Weighted
						Average						Average						Average
			Number			Exercise			Number			Exercise			Number			Exercise
			of			Price			of			Price			of			Price
			Options			per Share			Options			per Share			Options			per Share
Options outstanding January 1,			2,420,922		$	201.31			2,408,917		$	192.12			1,995,440		$	150.83
Granted			120,000			221.12			200,000			194.29			1,096,000			223.58
Exercised			(191,255)			174.55			(179,995)			69.53			(482,523)			88.07
Cancelled			(10,000)			197.90			(8,000)			223.50			(200,000)			203.64
Options outstanding December 31,			2,339,667		$	204.53			2,420,922		$	201.31			2,408,917		$	192.12
Options exercisable at December 31,			1,501,667		$	196.37			1,147,122		$	178.31			848,250		$	143.55

		2019			2018			2017
Stock option expense for the year (in 000's) (a)		$	4,950		$	17,162		$	8,707
Aggregate exercise date intrinsic value of options exercised during the year (in 000's)		$	11,848		$	25,117		$	61,334
Average assumptions used in valuing options with the Black-Scholes method:
Expected life of options in years, based upon historical experience			5			5			5
Risk-free interest rate			2.3%			2.7%			1.9%
Expected volatility, based upon historical volatility			8.9%			12.5%			17.9%
Expected dividend yield			3.6%			4.1%			3.6%
Average estimated value of options granted during the year		$	9.61		$	13.09		$	23.49

(a) Amounts for 2018 include $8.1 million, in connection with the acceleration of amortization on grants discussed above. Amounts for 2017 reflect a reduction in compensation expense of $0.8 million related to stock options forfeited during the period.

Restricted Share Units

RSUs generally vest ratably over 5 to 8 years from the grant date. The grantee receives dividends for each outstanding RSU equal to the per-share dividends received by our common shareholders. We expense any dividends previously paid upon forfeiture of the related RSU. Upon vesting, the grantee receives common shares equal to the number of vested RSUs, less common shares withheld in exchange for tax deposits made by the Company to satisfy the grantee’s statutory tax liabilities arising from the vesting.

The fair value of our RSUs is determined based upon the applicable closing trading price of our common shares.

The fair value of our RSUs outstanding at December 31, 2019 was approximately $131.9 million. Remaining compensation expense related to RSUs outstanding at December 31, 2019 totals approximately $85.1 million and is expected to be recognized as compensation expense over the next 4.6 years on average. The following tables set forth relevant information with respect to restricted shares (dollar amounts in thousands):

F-26

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

		2019						2018						2017
			Number of			Grant Date			Number of			Grant Date			Number of			Grant Date
			Restricted			Aggregate			Restricted			Aggregate			Restricted			Aggregate
			Share Units			Fair Value			Share Units			Fair Value			Share Units			Fair Value
Restricted share units outstanding January 1,			717,696		$	151,212			799,129		$	166,144			696,641		$	136,905
Granted			97,140			21,113			138,567			27,733			340,957			73,953
Vested			(160,329)			(32,714)			(164,104)			(30,717)			(144,473)			(25,305)
Forfeited			(35,357)			(7,553)			(55,896)			(11,948)			(93,996)			(19,409)
Restricted share units outstanding December 31,			619,150		$	132,058			717,696		$	151,212			799,129		$	166,144

		2019			2018			2017
Amounts for the year (in 000's, except number of shares):
Fair value of vested shares on vesting date		$	33,769		$	32,317		$	31,962
Cash paid for taxes upon vesting in lieu of issuing common shares		$	12,162		$	12,347		$	14,092
Common shares issued upon vesting			96,479			97,516			82,060
Restricted share unit expense (a)		$	21,662		$	53,869		$	28,841

(a)Amounts for 2019, 2018 and 2017 include approximately $1.2 million, $1.1 million and $0.7 million, respectively, in employer taxes incurred upon vesting. Amounts for 2018 include $22.6 million, in connection with the acceleration of amortization on grants to our CEO and CFO as discussed above. Amounts for 2017 reflect a reduction in compensation expense of $4.6 million related to RSUs forfeited during the period.

11.Segment Information

Our reportable segments reflect the significant components of our operations where discrete financial information is evaluated separately by our chief operating decision maker (“CODM”). We organize our segments based primarily upon the nature of the underlying products and services, as well as the drivers of profitability growth. The net income for each reportable segment included in the table below are in conformity with GAAP and our significant accounting policies as denoted in Note 2. The amounts not attributable to reportable segments are aggregated under “other items not allocated to segments.”

Following is a description of and basis for presentation for each of our reportable segments.

Self-Storage Operations

The Self-Storage Operations segment reflects the rental operations from all self-storage facilities we own. Our CODM reviews the net operating income (“NOI”) of this segment, which represents the related revenues less cost of operations (prior to depreciation expense), in assessing performance and making resource allocation decisions. The presentation in the tables below sets forth the NOI of this segment, as well as the depreciation expense for this segment, which while reviewed by our CODM and included in net income, is not considered by the CODM in assessing performance and decision making. For all periods presented, substantially all of our real estate facilities, goodwill and other intangible assets, other assets, and accrued and other liabilities are associated with the Self-Storage Operations segment.

F-27

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

Ancillary Operations

The Ancillary Operations segment reflects the sale of merchandise and reinsurance of policies against losses to goods stored by our self-storage tenants, activities which are incidental to our primary self-storage rental activities. Our CODM reviews the NOI of these operations in assessing performance and making resource allocation decisions.

Investment in PSB

This segment represents our 42% equity interest in PSB, a publicly-traded REIT that owns, operates, acquires and develops commercial properties, primarily multi-tenant flex, office, and industrial space. PSB has a separate management team and board of directors that makes its financing, capital allocation, and other significant decisions. In making resource allocation decisions with respect to our investment in PSB, the CODM reviews PSB’s net income, which is detailed in PSB’s periodic filings with the SEC. The segment presentation in the tables below includes our equity earnings from PSB.

Investment in Shurgard

This segment represents our equity interest in Shurgard, a publicly held company which owns and operates self-storage facilities located in seven countries in Western Europe. Shurgard has a separate management team and board of trustees that makes its financing, capital allocation, and other significant decisions. In making resource allocation decisions with respect to our investment in Shurgard, the CODM reviews Shurgard’s net income. The segment presentation below includes our equity earnings from Shurgard.

Presentation of Segment Information

The following tables reconcile NOI (as applicable) and net income of each segment to our consolidated net income (amounts in thousands):

F-28

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

			For the Years Ended December 31,
			2019			2018			2017
Self-Storage Segment
Revenue		$	2,684,552		$	2,597,607		$	2,512,433
Cost of operations			(752,579)			(695,731)			(657,633)
Net operating income			1,931,973			1,901,876			1,854,800
Depreciation and amortization			(512,918)			(483,646)			(454,526)
Net income			1,419,055			1,418,230			1,400,274
Ancillary Segment
Revenue			162,271			156,673			156,095
Cost of operations			(44,204)			(43,991)			(50,345)
Net operating income			118,067			112,682			105,750
Investment in PSB Segment
Equity in earnings of unconsolidated
real estate entities (a)			54,090			89,362			46,544
Investment in Shurgard Segment
Equity in earnings of unconsolidated
real estate entities (a)			15,457			14,133			25,948
Gain due to Shurgard public offering			-			151,616			-
Net income from Investment in Shurgard Segment			15,457			165,749			25,948
Total net income allocated to segments			1,606,669			1,786,023			1,578,516
Other items not allocated to segments:
General and administrative			(71,983)			(118,720)			(82,882)
Interest and other income			28,436			26,442			18,771
Equity in earnings of unconsolidated real
estate entities - Other Investments (a)			-			-			3,163
Interest expense			(45,641)			(32,542)			(12,690)
Foreign currency exchange gain (loss)			7,829			18,117			(50,045)
Casualty loss			-			-			(7,789)
Gain on sale of real estate			341			37,903			1,421
Net income		$	1,525,651		$	1,717,223		$	1,448,465

(a)See Note 4 for a reconciliation of these amounts to our total Equity in Earnings of Unconsolidated Real Estate Entities on our income statements.

12.Recent Accounting Pronouncements and Guidance

In February 2016, the FASB issued ASU 2016-02, Leases, which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The new standard requires a modified-retrospective approach to

F-29

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

adoption and became effective for interim and annual periods beginning on January 1, 2019. In July 2018, the FASB further amended this standard to allow for a new transition method that offers the option to use the effective date as the date of initial application and not adjust the comparative-period financial information. We adopted the new standard effective January 1, 2019, using the new transition method, recording a total of $38.7 million in right of use assets, reflected in other assets, and substantially the same amount in lease liabilities, reflected in accrued and other liabilities, for leases where we are the lessee (principally ground leases and office leases). We also reclassified related intangible assets totaling $5.6 million to other assets. The lease liabilities are recognized based on the present value of the remaining lease payments for each operating lease using each respective remaining lease term and a corresponding estimated incremental borrowing rate. We estimated the incremental borrowing rate primarily by reference to average yield spread on debt issuances by companies of a similar credit rating as us, and the treasury yields as of January 1, 2019. We had no material amount of leases covered by the standard where we are the lessor (principally our storage leases) because substantially all of such leases are month to month. For leases where we are the lessee or the lessor, we applied (i) the package of practical expedients to not reassess prior conclusions related to contracts that are or that contain leases, lease classification and initial direct costs, (ii) the hindsight practical expedient to determine the lease term and in assessing impairment of the right of use assets, and (iii) the easement practical expedient to not assess whether existing or expired land easements that were not previously accounted for as leases under ASC 840 are or contain a lease under this new standard. In addition, for leases where we are the lessee, we also elected to (a) not apply the new standard to our leases with an original term of 12 months or less, and (b) not separate lease and associated non-lease components.

13.Commitments and Contingencies

Contingent Losses

We are a party to various legal proceedings and subject to various claims and complaints; however, we believe that the likelihood of these contingencies resulting in a material loss to the Company, either individually or in the aggregate, is remote.

Insurance and Loss Exposure

We carry property, earthquake, general liability, employee medical insurance and workers compensation coverage through internationally recognized insurance carriers, subject to deductibles. Our deductible for general liability is $2.0 million per occurrence. Our annual deductible for property loss is $25.0 million per occurrence. This deductible decreases to $5.0 million once we reach $35.0 million in aggregate losses for occurrences that exceed $5.0 million. Insurance carriers’ aggregate limits on these policies of $75.0 million for property losses and $102.0 million for general liability losses are higher than estimates of maximum probable losses that could occur from individual catastrophic events determined in recent engineering and actuarial studies; however, in case of multiple catastrophic events, these limits could be exceeded.

We reinsure a program that provides insurance to our customers from an independent third-party insurer. This program covers customer claims for losses to goods stored at our facilities as a result of specific named perils (earthquakes are not covered by this program), up to a maximum limit of $5,000 per storage unit. We reinsure all risks in this program, but purchase insurance to cover this exposure for a limit of $15.0 million for losses in excess of $5.0 million per occurrence. We are subject to licensing requirements and regulations in several states. Customers participate in the program at their option. At December 31, 2019, there were approximately 935,000 certificates held by our self-storage customers, representing aggregate coverage of approximately $3.2 billion.

‎

F-30

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

Construction Commitments

We have construction commitments representing future expected payments for construction under contract totaling $77.2 million at December 31, 2019. We expect to pay approximately $69.7 million in 2020 and $7.5 million in 2021 for these construction commitments.

14.Supplementary Quarterly Financial Data (unaudited)

			Three Months Ended
		March 31,			June 30,			September 30,			December 31,
		2019			2019			2019			2019
			(Amounts in thousands, except per share data)
Self-storage and ancillary revenues		$	689,038		$	710,950		$	729,336		$	717,499
Self-storage and ancillary cost of operations		$	204,201		$	207,736		$	212,262		$	172,584
Depreciation and amortization		$	121,941		$	126,859		$	129,233		$	134,885
Net Income		$	367,678		$	371,456		$	399,420		$	387,097
Per Common Share
Net income - Basic		$	1.73		$	1.76		$	1.94		$	1.88
Net income - Diluted		$	1.73		$	1.76		$	1.93		$	1.87
			Three Months Ended
		March 31,			June 30,			September 30,			December 31,
		2018			2018			2018			2018
			(Amounts in thousands, except per share data)
Self-storage and ancillary revenues		$	669,924		$	685,528		$	706,368		$	692,460
Self-storage and ancillary cost of operations		$	192,827		$	190,977		$	195,544		$	160,374
Depreciation and amortization		$	117,979		$	119,777		$	124,516		$	121,374
Net Income		$	344,436		$	405,292		$	379,589		$	587,906
Per Common Share
Net income - Basic		$	1.66		$	2.00		$	1.85		$	3.05
Net income - Diluted		$	1.65		$	2.00		$	1.85		$	3.04

15.Subsequent Events

Subsequent to December 31, 2019, we acquired or were under contract to acquire 14 self-storage facilities (four in Ohio, three in California, two each in New York and Tennessee and one each in Indiana, Massachusetts, and Nebraska) with 1.1 million net rentable square feet, for $245.3 million.

On January 24, 2020, we completed a public offering of €500 million ($551.6 million) aggregate principal amount of senior notes bearing interest at an annual rate of 0.875% and maturing on January 24, 2032.

F-31

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

Interest on the senior notes is payable annually, commencing January 24, 2021. In connection with the offering, we incurred a total of $6.4 million in costs.

As we reported in an SEC form 8-K on February 14, 2020, we submitted a non-binding proposal to acquire 100% of the issued stapled securities of National Storage REIT (“NSR”), an Australia-based publicly-traded REIT (ASX:NSR) that owns and operates 167 self-storage facilities in Australia and New Zealand, for a cash purchase price of A$2.40 per share. Our proposal was subject to a number of conditions, including due diligence. Any transaction would be subject to processes for acquisition of widely held entities under Australian law, including securityholder approval. There is no assurance that Public Storage will reach a definitive agreement or consummate a transaction with NSR or that if such an agreement is reached, it will be on terms consistent with our non-binding proposal.

F-32

PUBLIC STORAGE
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
		Net	2019	Initial Cost		Costs	Gross Carrying Amount
	No. of	Rentable	Encum-		Buildings &	Subsequent	At December 31, 2019			Accumulated
Description	Facilities	Sq. Feet	brances	Land	Improvements	to Acquisition	Land	Buildings	Total	Depreciation

Self-storage facilities by market:
Los Angeles	224	16,168	498	510,249	924,346	336,653	507,863	1,263,385	1,771,248	737,208
Houston	127	10,426	-	186,320	467,084	216,915	185,781	684,538	870,319	287,542
San Francisco	138	8,982	-	241,791	527,127	211,251	254,541	725,628	980,169	456,544
Dallas/Ft. Worth	124	8,991	-	176,962	437,884	129,900	178,562	566,184	744,746	281,717
Chicago	130	8,172	-	137,165	352,595	128,165	140,002	477,923	617,925	361,662
New York	94	6,939	-	250,900	548,541	190,536	257,237	732,740	989,977	418,570
Atlanta	104	6,982	1,771	132,631	345,587	86,379	132,993	431,604	564,597	261,138
Seattle/Tacoma	97	6,794	-	198,063	531,742	104,116	198,710	635,211	833,921	324,181
Miami	94	6,726	-	239,291	497,380	105,510	241,184	600,997	842,181	307,964
Washington DC	91	5,648	-	233,905	406,769	116,974	239,059	518,589	757,648	306,497
Orlando/Daytona	72	4,550	11,886	140,411	253,375	57,731	145,892	305,625	451,517	154,128
Denver	61	4,531	9,299	95,009	226,499	92,835	95,730	318,613	414,343	143,582
Charlotte	56	4,354	-	80,253	205,370	76,528	88,116	274,035	362,151	118,762
Minneapolis/St. Paul	57	4,237	2,905	111,507	233,259	66,017	111,672	299,111	410,783	117,375
Tampa	54	3,682	-	88,919	181,402	47,994	91,681	226,634	318,315	122,703
Philadelphia	56	3,546	-	51,682	152,406	56,991	50,703	210,376	261,079	160,000
West Palm Beach	46	3,721	-	156,788	221,479	60,557	157,496	281,328	438,824	120,954
Detroit	42	2,950	-	63,804	168,897	37,770	64,654	205,817	270,471	111,495
Phoenix	40	2,664	-	65,718	185,117	27,224	65,709	212,350	278,059	103,146
Austin	32	2,447	-	56,918	127,011	43,766	58,940	168,755	227,695	83,512
Portland	43	2,256	-	51,182	126,464	27,536	51,840	153,342	205,182	101,422
Sacramento	34	1,959	-	25,141	69,409	28,184	25,646	97,088	122,734	76,661
Raleigh	28	1,975	-	50,348	99,583	38,195	51,479	136,647	188,126	60,484
San Diego	20	1,816	-	47,884	108,911	40,724	50,394	147,125	197,519	86,884
San Antonio	28	1,791	-	27,566	76,028	27,030	27,524	103,100	130,624	66,131
Norfolk	36	2,215	-	47,728	128,986	22,398	46,843	152,269	199,112	63,430
Boston	27	1,864	-	70,261	194,588	24,287	70,827	218,309	289,136	91,348
Columbus	22	1,629	-	25,341	64,746	27,256	25,448	91,895	117,343	44,934
Oklahoma City	22	1,531	-	35,704	68,360	13,470	35,704	81,830	117,534	23,568
Baltimore	23	1,472	-	25,176	79,734	19,078	25,300	98,688	123,988	70,717
Indianapolis	25	1,580	-	25,752	69,619	13,511	26,752	82,130	108,882	45,217

F-33

PUBLIC STORAGE
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
		Net	2019	Initial Cost		Costs	Gross Carrying Amount
	No. of	Rentable	Encum-		Buildings &	Subsequent	At December 31, 2019			Accumulated
Description	Facilities	Sq. Feet	brances	Land	Improvements	to Acquisition	Land	Buildings	Total	Depreciation

St. Louis	26	1,443	-	20,037	56,237	21,854	20,680	77,448	98,128	63,361
Kansas City	24	1,461	-	14,225	43,732	28,126	14,425	71,658	86,083	59,666
Columbia	23	1,331	-	20,169	57,131	19,882	20,928	76,254	97,182	35,292
Las Vegas	20	1,259	-	23,168	52,723	10,296	22,417	63,770	86,187	48,404
Milwaukee	15	964	916	13,189	32,071	10,104	13,158	42,206	55,364	33,057
Cincinnati	17	947	-	15,023	32,351	22,874	14,941	55,307	70,248	30,007
Louisville	15	916	-	23,563	46,108	7,523	23,562	53,632	77,194	13,630
Jacksonville	14	841	-	11,252	27,714	11,820	11,301	39,485	50,786	32,215
Nashville/Bowling Green	17	1,108	-	18,787	35,425	30,356	18,785	65,783	84,568	28,543
Honolulu	11	807	-	54,184	106,299	12,703	55,101	118,085	173,186	63,344
Greensboro	14	845	-	13,413	35,326	13,644	15,502	46,881	62,383	25,853
Colorado Springs	14	992	-	10,588	38,237	22,069	10,584	60,310	70,894	28,108
Chattanooga	10	695	-	6,569	26,045	7,500	6,371	33,743	40,114	14,691
Hartford/New Haven	11	693	-	6,778	19,959	21,850	8,443	40,144	48,587	31,810
Savannah	12	686	-	33,094	42,465	2,576	31,766	46,369	78,135	15,910
Charleston	14	950	-	16,947	56,793	17,256	17,923	73,073	90,996	23,801
Fort Myers/Naples	10	770	-	21,522	46,395	5,352	21,757	51,512	73,269	17,493
New Orleans	9	627	-	9,205	30,832	6,254	9,373	36,918	46,291	24,916
Greensville/Spartanburg/Asheville	11	623	-	9,036	20,767	10,051	9,965	29,889	39,854	20,324
Reno	7	559	-	5,487	18,704	4,058	5,487	22,762	28,249	12,110
Birmingham	14	538	-	5,229	17,835	13,326	5,117	31,273	36,390	27,335
Salt Lake City	8	517	-	7,846	15,947	4,860	7,495	21,158	28,653	14,506
Memphis	9	510	-	7,962	21,981	9,049	9,315	29,677	38,992	20,278
Buffalo/Rochester	9	462	-	6,785	17,954	3,836	6,783	21,792	28,575	13,589
Richmond	13	652	-	18,092	40,160	5,172	17,897	45,527	63,424	18,118
Tucson	7	439	-	9,403	25,491	5,734	9,884	30,744	40,628	19,101
Cleveland/Akron	7	433	-	4,070	16,139	5,483	4,463	21,229	25,692	11,954
Wichita	7	433	-	2,017	6,691	7,265	2,130	13,843	15,973	11,755
Mobile	10	452	-	4,688	21,170	4,906	4,515	26,249	30,764	12,900
Omaha	4	377	-	7,491	20,930	3,019	7,491	23,949	31,440	3,189
Monterey/Salinas	7	329	-	8,465	24,151	4,170	8,455	28,331	36,786	21,033
Palm Springs	3	242	-	8,309	18,065	1,286	8,309	19,351	27,660	10,356

F-34

PUBLIC STORAGE
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
		Net	2019	Initial Cost		Costs	Gross Carrying Amount
	No. of	Rentable	Encum-		Buildings &	Subsequent	At December 31, 2019			Accumulated
Description	Facilities	Sq. Feet	brances	Land	Improvements	to Acquisition	Land	Buildings	Total	Depreciation

Evansville	5	326	-	2,340	14,316	1,192	2,312	15,536	17,848	3,577
Dayton	5	230	-	1,074	8,975	4,817	1,073	13,793	14,866	7,066
Augusta	6	345	-	4,984	13,120	3,633	4,984	16,753	21,737	5,939
Fort Wayne	3	168	-	349	3,594	3,126	349	6,720	7,069	5,802
Providence	3	155	-	995	11,206	2,957	995	14,163	15,158	6,295
Huntsville/Decatur	3	153	-	1,024	3,321	3,029	971	6,403	7,374	5,963
Shreveport	2	150	-	817	3,030	2,254	741	5,360	6,101	4,678
Springfield/Holyoke	2	144	-	1,428	3,380	1,815	1,427	5,196	6,623	4,671
Rochester	2	99	-	1,047	2,246	2,090	980	4,403	5,383	3,931
Santa Barbara	2	98	-	5,733	9,106	452	5,733	9,558	15,291	5,417
Topeka	2	94	-	225	1,419	2,067	225	3,486	3,711	2,966
Lansing	2	88	-	556	2,882	891	556	3,773	4,329	2,239
Roanoke	3	159	-	2,147	13,801	842	2,147	14,643	16,790	2,523
Flint	1	56	-	543	3,068	242	542	3,311	3,853	1,826
Joplin	1	56	-	264	904	1,012	264	1,916	2,180	1,579
Syracuse	1	55	-	545	1,279	820	545	2,099	2,644	1,976
Modesto/Fresno/Stockton	1	33	-	44	206	968	193	1,025	1,218	795
Commercial and non-operating
real estate			-	13,194	26,143	28,811	14,231	53,917	68,148	40,107
	2,483	168,908	$27,275	$4,124,271	$9,274,122	$2,890,753	$4,186,873	$12,102,273	$16,289,146	$6,623,475
	Note: Buildings and improvements are depreciated on a straight-line basis over estimated useful lives ranging generally
	between 5 to 25 years. In addition, disclosures of the number and square footage of our facilities are unaudited.

F-35