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 5.400% 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.
3.4	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.
3.5	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.
3.6	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.
3.7	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.
3.8	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.
3.9	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.
3.10	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.
3.11	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.
3.12	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.
3.13	Articles Supplementary for Public Storage 4.625% Cumulative Preferred Shares, Series L. Filed with the Registrant’s Current Report on Form 8-K dated June 8, 2020 and incorporated by reference herein.
3.14	Articles Supplementary for Public Storage 4.125 % Cumulative Preferred Shares, Series M. Filed with the Registrant’s Current Report on Form 8-K dated August 11, 2020 and incorporated by reference herein.

3.15	Articles Supplementary for Public Storage 3.875% Cumulative Preferred Shares, Series N. Filed with the Registrant’s Current Report on Form 8-K dated September 29, 2020 and incorporated by reference herein.
3.16	Articles Supplementary for Public Storage 3.900% Cumulative Preferred Shares, Series O. Filed with the Registrant’s Current Report on Form 8-K dated November 9, 2020 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 – 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.
10.9*	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.
10.10	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.

10.11*	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.
10.12*	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.
10.13	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.
10.14	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.
10.15	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.
10.16	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.
10.17	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.
10.18	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.
10.19	Fourth Supplemental Indenture, dated as of January 19, 2021, 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 14, 2021 and incorporated herein by reference.
10.20	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.
10.21*	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.
10.22*	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.
10.23*	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.

10.24*	Form of 2016 Employee Stock Unit Agreement (2020). Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and incorporated herein by reference.
10.25*	Form of 2016 Plan Employee Non-Qualified Stock Option Agreement (2020). Filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and incorporated herein by reference.
10.26*	Form of 2016 Plan Performance-Based Non-Qualified Stock Option Agreement (2020). Filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 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 24, 2021	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 24, 2021
Joseph D. Russell, Jr.
/s/ H. Thomas Boyle	Chief Financial Officer (principal financial officer)	February 24, 2021
H. Thomas Boyle
/s/ Ronald L. Havner, Jr.	Chairman of the Board	February 24, 2021
Ronald L. Havner, Jr.
/s/ Tamara Hughes Gustavson	Trustee	February 24, 2021
Tamara Hughes Gustavson
/s/ Leslie Stone Heisz	Trustee	February 24, 2021
Leslie Stone Heisz
/s/ Michelle Millstone-Shroff	Trustee	February 24, 2021
Michelle Millstone-Shroff
/s/ Shankh S. Mitra	Trustee	February 24, 2021
Shankh S. Mitra
/s/ David J. Neithercut	Trustee	February 24, 2021
David J. Neithercut
/s/ Rebecca Owen	Trustee	February 24, 2021
Rebecca Owen

Signature	Title	Date
/s/ Kristy M. Pipes	Trustee	February 24, 2021
Kristy M. Pipes
/s/ Avedick B. Poladian	Trustee	February 24, 2021
Avedick B. Poladian
/s/ John Reyes	Trustee	February 24, 2021
John Reyes
/s/ Tariq M. Shaukat	Trustee	February 24, 2021
Tariq M. Shaukat
/s/ Ronald P. Spogli	Trustee	February 24, 2021
Ronald P. Spogli
/s/ Paul S. Williams	Trustee	February 24, 2021
Paul S. Williams

‎

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, 2020 and 2019	F-3
For the years ended December 31, 2020, 2019 and 2018:
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, 2020 and 2019, 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, 2020, 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, 2020 and 2019, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, 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, 2020, 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 24, 2021 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, 2020, the Company completed the acquisition of 62 real estate facilities for a total purchase price of $796.1 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 2020 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 2020 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. We 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, assessed the reasonableness of the allocated building value, and tested the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. Additionally, 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 24, 2021

F-2

PUBLIC STORAGE

BALANCE SHEETS

(Amounts in thousands, except share data)

	December 31,			December 31,
	2020			2019
ASSETS		(Unaudited)
Cash and equivalents	$	257,560		$	409,743
Real estate facilities, at cost:
Land		4,375,588			4,186,873
Buildings		12,997,039			12,102,273
		17,372,627			16,289,146
Accumulated depreciation		(7,152,135)			(6,623,475)
		10,220,492			9,665,671
Construction in process		188,079			141,934
		10,408,571			9,807,605
Investments in unconsolidated real estate entities		773,046			767,816
Goodwill and other intangible assets, net		204,654			205,936
Other assets		172,715			174,344
Total assets	$	11,816,546		$	11,365,444
LIABILITIES AND EQUITY
Notes payable	$	2,544,992		$	1,902,493
Preferred shares called for redemption (Note 8)		300,000			-
Accrued and other liabilities		394,655			383,284
Total liabilities		3,239,647			2,285,777
Commitments and contingencies (Note 13)
Equity:
Public Storage shareholders’ equity:
Preferred Shares, $0.01 par value, 100,000,000 shares authorized,
151,700 shares issued (in series) and outstanding, (162,600 at
December 31, 2019), at liquidation preference		3,792,500			4,065,000
Common Shares, $0.10 par value, 650,000,000 shares authorized,
174,581,742 shares issued and outstanding (174,418,615 shares at
December 31, 2019)		17,458			17,442
Paid-in capital		5,707,101			5,710,934
Accumulated deficit		(914,791)			(665,575)
Accumulated other comprehensive loss		(43,401)			(64,890)
Total Public Storage shareholders’ equity		8,558,867			9,062,911
Noncontrolling interests		18,032			16,756
Total equity		8,576,899			9,079,667
Total liabilities and equity	$	11,816,546		$	11,365,444

See accompanying notes.

F-3

PUBLIC STORAGE

STATEMENTS OF INCOME

(Amounts in thousands, except per share amounts)

	For the Years Ended December 31,
	2020			2019			2018
Revenues:
Self-storage facilities	$	2,721,630		$	2,684,552		$	2,597,607
Ancillary operations		193,438			170,556			161,916
		2,915,068			2,855,108			2,759,523
Expenses:
Self-storage cost of operations		807,543			762,416			709,739
Ancillary cost of operations		59,919			50,736			47,344
Depreciation and amortization		553,257			512,918			483,646
General and administrative		83,199			62,146			104,712
Interest expense		56,283			45,641			32,542
		1,560,201			1,433,857			1,377,983
Other increases (decreases) to net income:
Interest and other income		22,323			26,683			24,552
Equity in earnings of unconsolidated real estate entities		80,497			69,547			103,495
Foreign currency exchange (loss) gain		(97,953)			7,829			18,117
Gain on sale of real estate		1,493			341			37,903
Gain due to Shurgard public offering		-			-			151,616
Net income		1,361,227			1,525,651			1,717,223
Allocation to noncontrolling interests		(4,014)			(5,117)			(6,192)
Net income allocable to Public Storage shareholders		1,357,213			1,520,534			1,711,031
Allocation of net income to:
Preferred shareholders - distributions		(207,068)			(210,179)			(216,316)
Preferred shareholders - redemptions (Note 8)		(48,265)			(32,693)			-
Restricted share units		(3,545)			(4,895)			(5,815)
Net income allocable to common shareholders	$	1,098,335		$	1,272,767		$	1,488,900
Net income per common share:
Basic	$	6.29		$	7.30		$	8.56
Diluted	$	6.29		$	7.29		$	8.54
Basic weighted average common shares outstanding		174,494			174,287			173,969
Diluted weighted average common shares outstanding		174,642			174,530			174,297

See accompanying notes.

F-4

PUBLIC STORAGE

STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)

	For the Years Ended December 31,
	2020			2019			2018
Net income	$	1,361,227		$	1,525,651		$	1,717,223
Adjust for foreign currency exchange loss reflected
in gain on sale of real estate and gain on Shurgard
public offering		-			-			27,207
Foreign currency exchange gain (loss) on
investment in Shurgard		21,489			(830)			(16,203)
Total comprehensive income		1,382,716			1,524,821			1,728,227
Allocation to noncontrolling interests		(4,014)			(5,117)			(6,192)
Comprehensive income allocable to
Public Storage shareholders	$	1,378,702		$	1,519,704		$	1,722,035

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, 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)
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)

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
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
Issuance of 49,900 preferred shares (Note 8)		1,247,500			-			(39,294)			-			-			1,208,206			-			1,208,206
Redemption and shares called for redemption of 60,800 preferred shares (Note 8)		(1,520,000)			-			-			-			-			(1,520,000)			-			(1,520,000)
Issuance of common shares in connection with
share-based compensation (163,127 shares) (Note 10)		-			16			12,648			-			-			12,664			-			12,664
Share-based compensation expense, net of cash
paid in lieu of common shares (Note 10)		-			-			22,845			-			-			22,845			-			22,845
Acquisition of noncontrolling interests		-			-			(32)			-			-			(32)			(1)			(33)
Contributions by noncontrolling interests		-			-			-			-			-			-			2,629			2,629
Net income		-			-			-			1,361,227			-			1,361,227			-			1,361,227
Net income allocated to noncontrolling interests		-			-			-			(4,014)			-			(4,014)			4,014			-
Distributions to:
Preferred shareholders (Note 8)		-			-			-			(207,068)			-			(207,068)			-			(207,068)
Noncontrolling interests		-			-			-			-			-			-			(5,366)			(5,366)
Common shareholders and restricted share
unitholders ($8.00 per share)		-			-			-			(1,399,361)			-			(1,399,361)			-			(1,399,361)
Other comprehensive income (Note 2)		-			-			-			-			21,489			21,489			-			21,489
Balances at December 31, 2020	$	3,792,500		$	17,458		$	5,707,101		$	(914,791)		$	(43,401)		$	8,558,867		$	18,032		$	8,576,899

See accompanying notes.

F-7

PUBLIC STORAGE

STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	For the Years Ended December 31,
	2020			2019			2018
Cash flows from operating activities:
Net income	$	1,361,227		$	1,525,651		$	1,717,223
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		(1,493)			(341)			(37,903)
Depreciation and amortization		553,257			512,918			483,646
Equity in earnings of unconsolidated real estate entities		(80,497)			(69,547)			(103,495)
Distributions from cumulative equity in earnings of unconsolidated
real estate entities		72,098			73,259			109,754
Foreign currency exchange loss (gain)		97,953			(7,829)			(18,117)
Share-based compensation expense		33,363			25,833			69,936
Other		6,994			7,690			(5,782)
Total adjustments		681,675			541,983			346,423
Net cash flows from operating activities		2,042,902			2,067,634			2,063,646
Cash flows from investing activities:
Capital expenditures to maintain real estate facilities		(169,998)			(187,303)			(140,980)
Development and expansion of real estate facilities		(189,413)			(284,682)			(340,032)
Acquisition of real estate facilities and intangible assets		(792,266)			(437,758)			(181,020)
Distributions in excess of cumulative equity in earnings
from unconsolidated real estate entities		24,658			11,630			91,927
Repayment of note receivable		7,509			-			-
Proceeds from sale of real estate investments		1,796			762			54,184
Net cash flows used in investing activities		(1,117,714)			(897,351)			(515,921)
Cash flows from financing activities:
Repayments on notes payable		(2,020)			(1,920)			(1,784)
Issuance of notes payable, net of issuance costs		545,151			496,900			-
Issuance of preferred shares		1,208,206			1,059,156			-
Issuance of common shares		12,664			33,564			12,525
Redemption of preferred shares		(1,220,000)			(1,050,000)			-
Cash paid upon vesting of restricted share units		(10,518)			(12,162)			(12,347)
Acquisition of noncontrolling interests		(33)			(35,000)			-
Contributions by noncontrolling interests		2,629			4,148			1,720
Distributions paid to preferred shareholders,
common shareholders and restricted share unitholders		(1,606,429)			(1,608,749)			(1,612,680)
Distributions paid to noncontrolling interests		(5,366)			(6,672)			(7,022)
Net cash flows used in financing activities		(1,075,716)			(1,120,735)			(1,619,588)
Net cash flows (used in) from operating, investing, and financing activities		(150,528)			49,548			(71,863)
Net effect of foreign exchange impact on cash and equivalents, including
restricted cash		(426)			(13)			(171)
(Decrease) increase in cash and equivalents, including restricted cash	$	(150,954)		$	49,535		$	(72,034)

See accompanying notes.

F-8

PUBLIC STORAGE

STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	For the Years Ended December 31,
	2020			2019			2018
Cash and equivalents, including restricted cash at beginning 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
Cash and equivalents, including restricted cash at end of the period:
Cash and equivalents	$	257,560		$	409,743		$	361,218
Restricted cash included in other assets		25,040			23,811			22,801
	$	282,600		$	433,554		$	384,019
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	$	(10,359)		$	(16,558)		$	(11,422)
Construction or expansion of real estate facilities		(32,349)			(32,356)			81,157
Accrued and other liabilities		42,708			48,914			92,579
Real estate acquired in exchange for assumption of a liability		(3,799)			(1,817)			-
Liability assumed in connection with acquisition of real estate		3,799			-			-
Notes payable assumed in connection with acquisition of real estate		-			1,817			-
Preferred shares called for redemption and reclassified to liabilities		300,000			-			-
Preferred shares called for redemption and reclassified from equity		(300,000)			-			-
Other disclosures:
Foreign currency translation adjustment:
Real estate facilities, net of accumulated depreciation	$	-		$	-		$	203
Investments in unconsolidated real estate entities		(21,489)			830			15,997
Notes payable		-			(7,842)			(18,285)
Accumulated other comprehensive gain		21,489			6,999			1,914

See accompanying notes.

F-9

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

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 tenant reinsurance to the tenants at our self-storage facilities, merchandise sales and third party management, as well as the acquisition and development of additional self-storage space.

At December 31, 2020, we have direct and indirect equity interests in 2,548 self-storage facilities (with approximately 175.1 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 241 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 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 27.7 million 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 audit 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, 2019 and 2018 financial statements have been reclassified to conform to the December 31, 2020 presentation, including revenues from our third party management activities of $8.3 million and $5.2 million for the years ended December 31, 2019 and 2018, respectively, previously reported within interest and other income; and cost of operations from our third party management activities of $6.5 million and $3.4 million for the years ended December 31, 2019 and 2018, respectively, previously reported within interest and other income. This reclassification had no impact on the our balance sheet, statements of comprehensive income, statements of equity, or cash flows as of and for the year ended December 31, 2019 and for the year ended 2018.

Additionally, we revised our prior period financial statements to correct the presentation of share-based compensation expense between general and administrative expense and self-storage cost of operations. As a result, we revised our statements of income for the years ended December 31, 2019 and 2018 with an increase in self-storage cost of operations of $9.8 million and $14.0 million, respectively, and a corresponding decrease to general and administrative expenses. This immaterial correction had no impact on our total expenses or net income. The correction also had no impact on our balance sheet, statements of comprehensive income, statements of equity, or cash flows as of and for the year ended December 31, 2019 and for the year ended 2018.

F-10

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

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.

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 presented on our income statements represents our pro-rata share of the earnings of the Unconsolidated Real Estate Entities. The dividends we receive from the Unconsolidated Real Estate Entities are reflected on our statements of cash flows as “distributions from cumulative equity in earnings of unconsolidated real estate entities” to the extent of our cumulative equity in earnings, with any excess classified as “distributions in excess of cumulative equity in earnings from 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, 2020, the Company and the Subsidiaries own 2,548 self-storage facilities and four commercial facilities in the U.S. At December 31, 2020, 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”). For each taxable year in which we qualify for taxation as a REIT, we will not be subject to U.S. federal corporate income tax on our “REIT taxable income” (generally, taxable income subject to specified adjustments, including a deduction for dividends paid and excluding our net capital gain) that is distributed to our shareholders. We believe we have met these REIT requirements for all periods presented herein. Accordingly, we have recorded no U.S. federal corporate income tax expense related to our REIT taxable income.

Our tenant reinsurance, merchandise and third party management 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

F-11

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

had full knowledge of the relevant facts and circumstances of our positions. As of December 31, 2020, 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 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 (net of an allowance for uncollectible amounts), prepaid expenses, restricted cash and right-to-use assets. At December 31, 2019, other assets included notes receivable which were amortized on the effective interest method with book value of $4.4 million at the time they were repaid during 2020, at their respective $7.5 million contractual note balance. The $3.1 million excess proceeds were recorded as interest and other income in 2020.

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, 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. Because our estimates of fair value involve considerable judgment, including determination of the factors that market participants would consider in negotiating exchange values, such estimates may be limited in their ability to reflect what would actually be realized in an actual market exchange.

F-12

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

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 (net of an allowance for uncollectible receivables based upon expected losses in the portfolio) 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.

At December 31, 2020, 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 finite-lived assets.

Goodwill totaled $174.6 million at December 31, 2020 and 2019. 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, 2020 and 2019. Goodwill and the “Shurgard” trade name have indefinite lives and are not amortized.

Our finite-lived assets are comprised primarily of (i) acquired customers in place amortized relative to the benefit of the customers in place, with such amortization reflected as depreciation and amortization expense on our income statement and (ii) property tax abatements amortized relative to the reduction in property tax paid, with such amortization reflected as self-storage cost of operations on our income statement. At December 31, 2020, these intangibles had a net book value of $11.3 million ($12.5 million at December 31, 2019). Accumulated amortization totaled $27.3 million at December 31, 2020 ($27.5 million at December 31, 2019), and amortization expense of $16.1 million, $16.8 million and $16.6 million was recorded in 2020, 2019 and 2018, respectively.

The estimated future amortization expense for our finite-lived intangible assets at December 31, 2020 is approximately $11.9 million in 2021, $2.6 million in 2022 and $5.6 million thereafter. During 2020, 2019 and 2018, intangibles increased $14.9 million, $18.5 million and $11.6 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.

F-13

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

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.

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 1.226 U.S. Dollars per Euro at December 31, 2020 (1.122 at December 31, 2019), and average exchange rates of 1.141, 1.120 and 1.181 for the years ended December 31, 2020, 2019 and 2018, 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, which are comprised primarily of foreign currency exchange gains and losses on our investment in Shurgard.

F-14

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

Recent Accounting Pronouncements and Guidance

In November 2018, the FASB issued ASU 2018- 19, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses," which clarified that credit losses with respect to receivables arising from operating leases are to be evaluated within the scope of the leasing standard (ASU 2016-02), rather than within the scope of ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” We adopted this new standard on its effective date for us of January 1, 2020, which did not have a material impact on our consolidated financial statements.

Net Income per Common Share

Net income is allocated to (i) noncontrolling interests based upon their share of the net income of the Subsidiaries and (ii) preferred shareholders, to the extent redemption cost exceeds the related original net issuance proceeds (an “EITF D-42 allocation”), with the remaining net income 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 share, 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):

F-15

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

		For the Years Ended
		December 31,
		2020			2019				2018
	Weighted average common shares and equivalents
	outstanding:
	Basic weighted average common
	shares outstanding		174,494			174,287			173,969
	Net effect of dilutive stock options -
	based on treasury stock method		148			243			328
	Diluted weighted average common
	shares outstanding		174,642			174,530			174,297

3.Real Estate Facilities

Activity in real estate facilities during 2020, 2019 and 2018 is as follows:

		For the Years Ended
		2020			2019			2018
		(Amounts in thousands)
	Operating facilities, at cost:
	Beginning balance	$	16,289,146		$	15,296,844		$	14,665,989
	Capital expenditures to maintain real estate facilities		163,834			192,539			139,397
	Acquisitions		781,219			421,097			169,436
	Dispositions		(303)			(426)			(25,633)
	Developed or expanded facilities opened for operation		138,731			379,092			348,270
	Impact of foreign exchange rate changes		-			-			(615)
	Ending balance		17,372,627			16,289,146			15,296,844
	Accumulated depreciation:
	Beginning balance		(6,623,475)			(6,140,072)			(5,700,331)
	Depreciation expense		(528,660)			(483,408)			(457,029)
	Dispositions		-			5			16,876
	Impact of foreign exchange rate changes		-			-			412
	Ending balance		(7,152,135)			(6,623,475)			(6,140,072)
	Construction in process:
	Beginning balance		141,934			285,339			264,441
	Costs incurred to develop and expand real estate facilities		188,102			235,687			362,397
	Write-off of cancelled projects		(3,226)			-			-
	Developed or expanded facilities opened for operation		(138,731)			(379,092)			(348,270)
	Dispositions		-			-			(2,698)
	Transfer from other assets		-			-			9,469
	Ending balance		188,079			141,934			285,339
	Total real estate facilities at December 31,	$	10,408,571		$	9,807,605		$	9,442,111

During 2020, we acquired 62 self-storage facilities (5.1 million net rentable square feet of storage space), for a total cost of $792.3 million which includes the assumption of a $3.8 million liability. Approximately $14.9 million of the total cost was allocated to intangible assets. We completed development and redevelopment activities costing $138.7 million during 2020, adding 1.1 million net rentable square feet of self-storage space.

F-16

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

Included in general and administrative expense in 2020 is $3.2 million in development projects which were cancelled. Construction in process at December 31, 2020 consists of projects to develop new self-storage facilities and expand existing self-storage facilities.

During 2020, our accrual for unpaid construction costs decreased $1.3 million (a $49.0 million decrease for the same period in 2019). During 2020, our accrual for capital expenditures to maintain real estate facilities decreased $6.2 million (a $5.2 million increase for the same period in 2019).

During 2019, we acquired 44 self-storage facilities and one commercial facility (3.1 million 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.

During 2019, our accrual for unpaid construction costs decreased $49.0 million (a $22.4 million increase for the same period in 2018). During 2019, our accrual for capital expenditures to maintain real estate facilities increased $5.2 million (a $1.6 million decrease for the same period in 2018).

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.

At December 31, 2020, the adjusted basis of real estate facilities for U.S. federal tax purposes was approximately $11.2 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): ‎

F-17

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

		Investments in Unconsolidated Real Estate						Equity in Earnings of Unconsolidated Real Estate
		Entities at December 31,						Entities for the Year Ended December 31,
		2020			2019			2020			2019			2018
	PSB	$	431,963		$	427,875		$	64,835		$	54,090		$	89,362
	Shurgard		341,083			339,941			15,662			15,457			14,133
	Total	$	773,046		$	767,816		$	80,497		$	69,547		$	103,495

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 approximate 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, 2020 ($132.87 per share of PSB common stock), the shares and units we owned had a market value of approximately $1.9 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 2020, 2019, and 2018, we received cash distributions from PSB totaling $60.7 million, $60.7 million, and $55.0 million, respectively.

At December 31, 2020, 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 $3.4 million ($4.2 million at December 31, 2019). 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 $0.8 million, $3.2 million, and $1.8 million during 2020, 2019, and 2018, respectively.

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

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 began to 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, 2020 (€35.50 per share of Shurgard common stock, at 1.226 exchange rate of US Dollars to the Euro), the shares we owned had a market value of approximately $1.4 billion.

Our equity in earnings of Shurgard is comprised of our equity share of Shurgard’s net income, plus $1.1 million, $1.0 million, and $1.3 million for 2020, 2019 and 2018, respectively, representing our equity share

F-18

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

of the trademark license fees that Shurgard pays to us for the use of the “Shurgard” trademark. We classify the remaining license fees we receive from Shurgard 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 cumulative equity in earnings of unconsolidated real estate entities” to the extent of our cumulative earnings, with any excess classified as “distributions in excess of cumulative equity in earnings from unconsolidated real estate entities.” During 2020 and 2019, Shurgard paid €0.99 and €0.67, respectively, per share in dividends to its shareholders, of which our share totaled $34.9 million and $23.1 million, respectively. 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 increased our investment in Shurgard by approximately $21.5 million in 2020 and decreased our investment in Shurgard by approximately $0.8 million and $16.0 million in 2019 and 2018, respectively.

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

5.Credit Facility

We have a revolving credit agreement (the “Credit Facility”) with a $500 million borrowing limit, which matures on April 19, 2024. Amounts drawn on the Credit Facility bear annual interest at rates ranging from LIBOR plus 0.7% 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 0.7% at December 31, 2020). We are also required to pay a quarterly facility fee ranging from 0.07% per annum to 0.25% per annum depending upon the ratio of our Total Indebtedness to our Gross Asset Value (0.07% per annum at December 31, 2020). At December 31, 2020 and February 24, 2021, we had no outstanding borrowings under this Credit Facility. We had undrawn standby letters of credit, which reduce our borrowing capacity, totaling $24.3 million at December 31, 2020 ($15.9 million at December 31, 2019). The Credit Facility has various customary restrictive covenants, all of which we were in compliance with at December 31, 2020.

F-19

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

6.Notes Payable

Our notes payable are reflected net of issuance costs (including original issue discounts), which are amortized as interest expense on the effective interest method over the term of each respective note. Our notes payable at December 31, 2020 and 2019 are set forth in the tables below:

					Amounts at December 31, 2020
	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		$	(891)		$	499,109		$	517,419
Notes due September 15, 2027	3.094%		3.218%			500,000			(3,548)			496,452			560,833
Notes due May 1, 2029	3.385%		3.459%			500,000			(2,567)			497,433			574,833
						1,500,000			(7,006)			1,492,994			1,653,085
Euro Denominated Unsecured Debt
Notes due April 12, 2024	1.540%		1.540%			122,646			-			122,646			129,192
Notes due November 3, 2025	2.175%		2.175%			296,821			-			296,821			323,552
Notes due January 24, 2032	0.875%		0.978%			613,232			(5,931)			607,301			634,389
						1,032,699			(5,931)			1,026,768			1,087,133
Mortgage Debt, secured by 27
real estate facilities with a net
book value of $102.1 million	3.962%		3.947%			25,230			-			25,230			26,958
					$	2,557,929		$	(12,937)		$	2,544,992		$	2,767,176

											Amounts at
											December 31, 2019
												Book			Fair
												Value			Value
											($ amounts in thousands)
U.S. Dollar Denominated Unsecured Debt
Notes due September 15, 2022											$	498,581		$	505,639
Notes due September 15, 2027												495,924			520,694
Notes due May 1, 2029												497,124			531,911
												1,491,629			1,558,244
Euro Denominated Unsecured Debt
Notes due April 12, 2024												112,156			115,932
Notes due November 3, 2025												271,433			298,398
Notes due January 24, 2032												-			-
												383,589			414,330
Mortgage Debt												27,275			28,506
											$	1,902,493		$	2,001,080

F-20

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

U.S. Dollar Denominated Unsecured Notes

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 along with notes previously issued in 2017 are referred to hereinafter as the “U.S. Dollar Denominated Notes.”

The U.S. Dollar Denominated Notes have various financial covenants, all of which we were in compliance with at December 31, 2020. Included in these covenants are (a) a maximum Debt to Total Assets of 65% (approximately 8% at December 31, 2020) and (b) a minimum ratio of Adjusted EBITDA to Interest Expense of 1.5x (approximately 38x for the twelve months ended December 31, 2020) 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”) consist of three tranches, (i) €242.0 million issued to institutional investors on November 3, 2015 for $264.3 million in net proceeds upon converting the Euros to U.S. Dollars, (ii) €100.0 million issued to institutional investors on April 12, 2016 for $113.6 million in net proceeds upon converting the Euros to U.S. Dollars and (iii) €500.0 million issued in a public offering on January 24, 2020 for $545.2 million in net proceeds upon converting the Euros to U.S. Dollars. Interest is payable semi-annually on the notes issued November 3, 2015 and April 12, 2016, and annually on the notes issued January 24, 2020. The Euro Notes have financial covenants similar to those of the U.S. Dollar Notes.

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 (loss) gain” on our income statement (a loss of $98.0 million for 2020, as compared to gains of $7.8 million and $18.1 million for 2019 and 2018, respectively).

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, 2020, 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, 2020, approximate principal maturities of our Notes Payable are as follows (amounts in thousands):

F-21

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

	Unsecured			Mortgage
	Debt			Debt			Total
2021	$	-		$	1,851		$	1,851
2022		500,000			2,574			502,574
2023		-			19,219			19,219
2024		122,646			124			122,770
2025		296,821			131			296,952
Thereafter		1,613,232			1,331			1,614,563
	$	2,532,699		$	25,230		$	2,557,929
Weighted average effective rate		2.4%			3.9%			2.4%

Cash paid for interest totaled $52.7 million, $48.3 million and $36.3 million for 2020, 2019 and 2018, respectively. Interest capitalized as real estate totaled $3.4 million, $3.9 million and $4.8 million for 2020, 2019 and 2018, respectively.

7.Noncontrolling Interests

At December 31, 2020, the noncontrolling interests represent (i) third-party equity interests in subsidiaries owning 21 operating self-storage facilities and five 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, 2020, the Noncontrolling Interests cannot require us to redeem their interests, other than pursuant to a liquidation of the subsidiary.

During 2020, 2019 and 2018, we allocated a total of $4.0 million, $5.1 million and $6.2 million, respectively, of income to these interests; and we paid $5.4 million, $6.7 million and $7.0 million, respectively, in distributions to these interests.

During 2019, we acquired noncontrolling interests for an aggregate of $35.0 million in cash, of which $11.1 million was allocated to Noncontrolling Interests, with the remainder allocated to Paid-in Capital. During 2020, 2019 and 2018, Noncontrolling Interests contributed $2.6 million, $4.1 million and $1.7 million, respectively, to our subsidiaries.

8.Shareholders’ Equity

Preferred Shares

At December 31, 2020 and 2019, we had the following series of Cumulative Preferred Shares (“Preferred Shares”) outstanding:

F-22

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

							At December 31, 2020					At December 31, 2019
	Series		Earliest Redemption Date		Dividend Rate		Shares Outstanding		Liquidation Preference			Shares Outstanding		Liquidation Preference
							(Dollar amounts in thousands)
	Series V		9/20/2017		5.375%		-		$	-		19,800		$	495,000
	Series W		1/16/2018		5.200%		-			-		20,000			500,000
	Series X		3/13/2018		5.200%		-			-		9,000			225,000
	Series B		1/20/2021		5.400%		-			-		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		11,400			285,000
	Series I		9/12/2024		4.875%		12,650			316,250		12,650			316,250
	Series J		11/15/2024		4.700%		10,350			258,750		10,350			258,750
	Series K		12/20/2024		4.750%		9,200			230,000		9,200			230,000
	Series L		6/17/2025		4.625%		22,600			565,000		-			-
	Series M		8/14/2025		4.125%		9,200			230,000		-			-
	Series N		10/6/2025		3.875%		11,300			282,500		-			-
	Series O		11/17/2025		3.900%		6,800			170,000		-			-
	Total Preferred Shares						151,700		$	3,792,500		162,600		$	4,065,000

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, 2020, 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.

In 2020, we redeemed our Series V, Series W and Series X Preferred Shares, at par, for a total of $1.22 billion in cash, before payment of accrued dividends.

F-23

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

On December 14, 2020, we called for redemption of, and on January 20, 2021, we redeemed our 5.40% Series B Preferred Shares, at par. The liquidation value (at par) of $300.0 million was reclassified as a liability at December 31, 2020. We recorded a $9.9 million allocation of income from our common shareholders to the holders of our Preferred Shares in 2020 in connection with this redemption.

In 2020, we issued an aggregate 49.9 million depositary shares, each representing 0.001 of a share of our Series L, Series M, Series N and Series O Preferred Shares, at an issuance price of $25.00 per depositary share, for a total of $1.25 billion in gross proceeds, and we incurred $39.3 million in issuance costs.

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 2020 and 2019, we recorded $48.3 million and $32.7 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, including the redemption of our Series B Preferred Shares as noted above.

Common Shares

During 2020, 2019 and 2018, activity with respect to the issuance of our common shares was as follows (dollar amounts in thousands):

		2020						2019						2018
			Shares			Amount			Shares			Amount			Shares			Amount
Employee stock-based compensation and
exercise of stock options (Note 10)			163,127		$	12,664			287,734		$	33,564			277,511		$	12,525

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, 2020, we repurchased approximately 23.7 million shares pursuant to this authorization; none of which were repurchased during the three years ended December 31, 2020.

At December 31, 2020 and 2019, we had 3,513,955 and 2,958,817, 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 corporate 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), $1.399 billion ($8.00 per share) and $1.396 billion ($8.00 per share) for the years ended December 31, 2020, 2019 and 2018, respectively. Preferred share dividends totaled $207.1 million, $210.2 million and $216.3 million for the years ended December 31, 2020, 2019 and 2018, respectively.

F-24

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

For the tax year ended December 31, 2020, distributions for the common shares and all the various series of preferred shares were classified as follows:

		2020 (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, 2020 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, a current member of the Board, and his son B. Wayne Hughes, Jr., a former member of the Board who retired effective December 31, 2020, collectively own approximately 13.0% of our common shares outstanding at December 31, 2020.

At December 31, 2020, Tamara Hughes Gustavson and her adult children owned and controlled 64 self-storage facilities in Canada. Ms. Gustavson’s direct ownership in these properties is less than 1.0%. 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 $1.6 million, $1.5 million and $1.3 million for the years ended December 31, 2020, 2019 and 2018, 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 or modified 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, and (iii) the recipient is affected by changes in the market price of our stock.

We amortize the grant-date fair value of awards, including grants to nonemployee service providers, as compensation expense over the service period, which begins on the grant date and ends on the expected 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-25

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

Modifications to the terms of awards that were probable of vesting before the modification (“Type I Modifications”) are recorded prospectively, with remaining unamortized grant-date fair value at the time of modification amortized over the remaining service period. Modifications of awards which were considered improbable of vesting before the modification (“Type III Modifications”) are accounted for as a cancellation of the original award and a new grant under the revised terms.

In July 2020, our share-based compensation plans were modified to allow immediate vesting upon retirement (“Retirement Acceleration”), and to extend the exercisability of outstanding stock options up to a year after retirement, for currently outstanding and future grants. Prior to the modification, unvested awards were forfeited, and outstanding vested stock options were cancelled, upon retirement. Employees are eligible for Retirement Acceleration if they meet certain conditions including length of service, age, notice of intent to retire, and facilitation of succession for their role.

This modification results in accelerating amortization of compensation expense for each grant by changing the end of the service period from the original vesting date to the date an employee is expected to be eligible for Retirement Acceleration, if earlier. As a result, the Company recorded $5.7 million in accelerated compensation expense during 2020, with such amounts included in the amounts disclosed below under “Stock Options” and “Restricted Share Units.”

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 10 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.

F-26

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

During 2020, 770,000 stock options were granted where vesting is dependent upon meeting certain performance targets with respect to 2020, 2021, and 2022. As of December 31, 2020, these targets are expected to be met at 100% achievement. These options are included in the grants during 2020 and in options outstanding at December 31, 2020, and $3.0 million in related compensation expense was recorded during 2020.

The stock options outstanding at December 31, 2020 have an aggregate intrinsic value (the excess, if any, of each option’s market value over the exercise price) of approximately $63.2 million and remaining average contractual lives of approximately six years. The aggregate intrinsic value of exercisable stock options at December 31, 2020 amounted to approximately $52.3 million. Approximately 1,240,000 of the stock options outstanding at December 31, 2020, have an exercise price of more than $225. Included in our stock options exercisable at December 31, 2020, are 16,667 stock options which expire through June 30, 2021, with an average exercise price per share of $115.96.

Additional information with respect to stock options during 2020, 2019 and 2018 is as follows:

		2020						2019						2018
						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,			2,339,667		$	204.53			2,420,922		$	201.31			2,408,917		$	192.12
Granted			840,000			226.58			120,000			221.12			200,000			194.29
Exercised			(71,500)			175.16			(191,255)			174.55			(179,995)			69.53
Cancelled			(147,000)			222.67			(10,000)			197.90			(8,000)			223.50
Options outstanding December 31,			2,961,167		$	210.59			2,339,667		$	204.53			2,420,922		$	201.31
Options exercisable at December 31,			1,585,091		$	199.54			1,501,667		$	196.37			1,147,122		$	178.31

		2020			2019			2018
Stock option expense for the year (in 000's) (a)		$	7,613		$	4,950		$	17,162
Aggregate exercise date intrinsic value of options exercised during the year (in 000's)		$	3,433		$	11,848		$	25,117
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			0.43%			2.3%			2.7%
Expected volatility, based upon historical volatility			21.6%			8.9%			12.5%
Expected dividend yield			3.8%			3.6%			4.1%
Average estimated value of options granted during the year		$	17.79		$	9.61		$	13.09

(a) Amounts for 2020 include $0.3 million in connection with the Retirement Acceleration. Amounts for 2018 include $8.1 million, in connection with the acceleration of amortization on grants discussed above. Of the total expense recorded, $2.8 million, $2.2 million and $2.1 million for 2020, 2019 and 2018,

F-27

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

respectively, was allocated to cost of operations, with the remainder allocated to general and administrative expense.

Restricted Share Units

RSUs generally vest 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, 2020 was approximately $127.7 million. Remaining compensation expense related to RSUs outstanding at December 31, 2020 totals approximately $76.9 million and is expected to be recognized as compensation expense over the next 4 years on average. The following tables set forth relevant information with respect to restricted shares (dollar amounts in thousands):

		2020						2019						2018
			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,			619,150		$	132,058			717,696		$	151,212			799,129		$	166,144
Granted			110,755			24,617			97,140			21,113			138,567			27,733
Vested			(140,089)			(28,141)			(160,329)			(32,714)			(164,104)			(30,717)
Forfeited			(37,028)			(7,964)			(35,357)			(7,553)			(55,896)			(11,948)
Restricted share units outstanding December 31,			552,788		$	120,570			619,150		$	132,058			717,696		$	151,212

		2020			2019			2018
Amounts for the year (in 000's, except number of shares):
Fair value of vested shares on vesting date		$	31,076		$	33,769		$	32,317
Cash paid for taxes upon vesting in lieu of issuing common shares		$	10,518		$	12,162		$	12,347
Common shares issued upon vesting			91,627			96,479			97,516
Restricted share unit expense (a)		$	26,359		$	21,662		$	53,869

(a)Amounts for 2020, 2019 and 2018 include approximately $1.3 million, $1.2 million and $1.1 million, respectively, in employer taxes incurred upon vesting. Amounts for 2020 include $5.4 million, in connection with the Retirement Acceleration as discussed above. Amounts for 2018 include $22.6 million, in connection with the acceleration of amortization on grants to our CEO and CFO as discussed above. Of the total expense recorded, $12.1 million, $9.9 million and $14.3 million for 2020, 2019 and 2018, respectively, was allocated to cost of operations, with the remainder allocated to general and administrative expense.

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

F-28

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

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.

Ancillary Operations

The Ancillary Operations segment reflects the operations of our tenant reinsurance, merchandise sales and third party management activities.

Investment in PSB

This segment represents our approximate 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 approximate 35% 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-29

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

			For the Years Ended December 31,
			2020			2019			2018
Self-Storage Segment
Revenue		$	2,721,630		$	2,684,552		$	2,597,607
Cost of operations			(807,543)			(762,416)			(709,739)
Net operating income			1,914,087			1,922,136			1,887,868
Depreciation and amortization			(553,257)			(512,918)			(483,646)
Net income			1,360,830			1,409,218			1,404,222
Ancillary Segment
Revenue			193,438			170,556			161,916
Cost of operations			(59,919)			(50,736)			(47,344)
Net operating income			133,519			119,820			114,572
Investment in PSB Segment (a) - Equity in earnings of unconsolidated entities			64,835			54,090			89,362
Investment in Shurgard Segment (a) - Equity in earnings of unconsolidated entities			15,662			15,457			14,133
Gain due to Shurgard public offering			-			-			151,616
Net income from Investment in Shurgard Segment			15,662			15,457			165,749
Total net income allocated to segments			1,574,846			1,598,585			1,773,905
Other items not allocated to segments:
General and administrative			(83,199)			(62,146)			(104,712)
Interest and other income			22,323			26,683			24,552
Interest expense			(56,283)			(45,641)			(32,542)
Foreign currency exchange (loss) gain			(97,953)			7,829			18,117
Gain on sale of real estate			1,493			341			37,903
Net income		$	1,361,227		$	1,525,651		$	1,717,223

(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 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

F-30

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

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, 2020, there were approximately 990,000 certificates held by our self-storage customers, representing aggregate coverage of approximately $3.9 billion.

‎

F-31

PUBLIC STORAGE

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

Construction Commitments

We have construction commitments representing future expected payments for construction under contract totaling $105.0 million at December 31, 2020. We expect to pay approximately $95.2 million in 2021 and $9.8 million in 2022 for these construction commitments.

14.Subsequent Events

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

On January 19, 2021, we completed a public offering of $500 million aggregate principal amount of senior notes bearing interest at an annual rate of 0.875% and maturing on February 15, 2026. Interest on the senior notes is payable semi-annually, commencing August 15, 2021. In connection with the offering, we incurred a total of $3.8 million in costs.

On January 20, 2021, we redeemed our 5.4% Series B Preferred Shares, at par, for a total of $300 million in cash before payment of accrued dividends.

F-32

PUBLIC STORAGE
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
(Amounts in thousands, except number of properties)
		Net	2020	Initial Cost		Costs	Gross Carrying Amount
	No. of	Rentable	Encum-		Buildings &	Subsequent	At December 31, 2020			Accumulated
Description	Facilities	Sq. Feet	brances	Land	Improvements	to Acquisition	Land	Buildings	Total	Depreciation

Self-storage facilities by market:
Los Angeles	225	16,265	455	519,547	942,206	372,709	517,161	1,317,301	1,834,462	798,302
Houston	128	10,665	-	186,526	469,132	237,738	185,847	707,549	893,396	315,349
San Francisco	138	8,980	-	241,791	527,127	223,936	254,541	738,313	992,854	488,482
Dallas/Ft. Worth	124	8,969	-	176,962	437,884	132,768	178,562	569,052	747,614	306,815
Chicago	134	8,581	-	141,683	408,749	132,059	144,520	537,971	682,491	382,269
New York	96	7,011	-	277,121	586,592	205,542	283,458	785,797	1,069,255	455,571
Atlanta	106	7,138	1,713	135,099	361,503	90,812	135,461	451,953	587,414	279,284
Seattle/Tacoma	97	6,790	-	198,063	531,742	110,562	198,710	641,657	840,367	349,944
Miami	96	7,126	-	243,988	522,557	139,116	245,881	659,780	905,661	335,520
Washington DC	91	5,645	-	233,905	406,769	121,226	239,059	522,841	761,900	327,341
Orlando/Daytona	72	4,551	11,589	140,411	253,375	59,516	145,892	307,410	453,302	166,849
Denver	64	4,740	8,925	99,547	247,641	98,240	100,268	345,160	445,428	156,803
Charlotte	56	4,360	-	80,253	205,370	79,349	88,116	276,856	364,972	131,456
Minneapolis/St. Paul	61	4,721	2,174	115,112	266,840	93,719	115,277	360,394	475,671	131,684
Tampa	57	3,878	-	93,022	204,543	49,349	95,784	251,130	346,914	132,562
Philadelphia	61	4,004	-	56,991	224,104	58,839	56,012	283,922	339,934	167,192
West Palm Beach	46	3,545	-	156,788	221,479	67,459	157,496	288,230	445,726	133,996
Detroit	47	3,350	-	66,861	213,857	39,152	67,711	252,159	319,870	120,220
Phoenix	42	2,871	-	68,515	213,718	28,224	68,506	241,951	310,457	112,212
Austin	35	2,762	-	65,542	149,481	44,821	67,564	192,280	259,844	91,292
Portland	45	2,426	-	54,370	150,634	28,158	55,028	178,134	233,162	107,422
Sacramento	34	1,959	-	25,141	69,409	31,275	25,625	100,200	125,825	80,386
Raleigh	28	1,975	-	50,348	99,583	38,677	51,337	137,271	188,608	66,430
San Diego	22	2,037	-	73,713	137,796	42,682	76,223	177,968	254,191	93,801
San Antonio	28	1,791	-	27,566	76,028	27,655	27,524	103,725	131,249	70,033
Norfolk	36	2,215	-	47,728	128,986	25,014	46,843	154,885	201,728	70,288
Boston	28	1,964	-	80,843	209,495	29,287	81,409	238,216	319,625	101,407
Columbus	27	2,015	-	44,983	92,001	28,437	45,090	120,331	165,421	48,804
Oklahoma City	23	1,645	-	38,265	73,968	13,775	38,265	87,743	126,008	27,343
Baltimore	24	1,588	-	28,396	92,861	20,559	28,520	113,296	141,816	75,042
Indianapolis	26	1,697	-	31,636	74,206	17,657	32,636	90,863	123,499	48,772

F-33

PUBLIC STORAGE
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
(Amounts in thousands, except number of properties)
		Net	2020	Initial Cost		Costs	Gross Carrying Amount
	No. of	Rentable	Encum-		Buildings &	Subsequent	At December 31, 2020			Accumulated
Description	Facilities	Sq. Feet	brances	Land	Improvements	to Acquisition	Land	Buildings	Total	Depreciation

St. Louis	28	1,786	-	22,463	79,356	38,025	23,106	116,738	139,844	66,546
Kansas City	25	1,647	-	14,567	56,147	35,619	14,767	91,566	106,333	62,368
Columbia	23	1,345	-	20,169	57,131	22,005	20,928	78,377	99,305	38,966
Las Vegas	21	1,355	-	25,038	68,513	11,362	24,287	80,626	104,913	50,563
Milwaukee	15	964	374	13,189	32,071	10,281	13,158	42,383	55,541	34,617
Cincinnati	18	1,051	-	17,135	46,739	23,150	17,053	69,971	87,024	32,167
Louisville	15	916	-	23,563	46,108	7,935	23,562	54,044	77,606	16,253
Jacksonville	14	841	-	11,252	27,714	12,056	11,301	39,721	51,022	33,917
Nashville/Bowling Green	17	1,108	-	18,787	35,425	30,785	18,785	66,212	84,997	31,221
Honolulu	11	807	-	54,184	106,299	14,098	55,101	119,480	174,581	68,300
Greensboro	14	845	-	13,413	35,326	13,992	15,502	47,229	62,731	27,695
Colorado Springs	14	992	-	10,588	38,237	22,564	10,585	60,804	71,389	30,357
Chattanooga	10	697	-	6,569	26,045	7,651	6,371	33,894	40,265	16,037
Hartford/New Haven	11	693	-	6,778	19,959	22,327	8,443	40,621	49,064	33,355
Savannah	12	700	-	33,094	42,465	4,118	31,766	47,911	79,677	18,038
Charleston	14	950	-	16,947	56,793	17,984	17,923	73,801	91,724	26,832
Fort Myers/Naples	11	861	-	23,298	56,012	5,537	23,533	61,314	84,847	19,964
New Orleans	9	627	-	9,205	30,832	6,667	9,373	37,331	46,704	26,365
Greensville/Spartanburg/Asheville	11	622	-	9,036	20,767	10,334	9,965	30,172	40,137	21,772
Reno	7	559	-	5,487	18,704	4,163	5,487	22,867	28,354	12,925
Birmingham	15	606	-	6,316	25,567	13,578	6,204	39,257	45,461	28,113
Salt Lake City	9	566	-	10,316	19,515	4,977	9,965	24,843	34,808	15,204
Memphis	11	645	-	19,581	29,852	9,551	20,934	38,050	58,984	21,854
Buffalo/Rochester	9	462	-	6,785	17,954	3,980	6,783	21,936	28,719	14,492
Richmond	13	650	-	18,092	40,160	5,948	17,897	46,303	64,200	20,124
Tucson	7	439	-	9,403	25,491	5,868	9,884	30,878	40,762	20,371
Cleveland/Akron	7	434	-	4,070	16,139	5,538	4,463	21,284	25,747	12,947
Wichita	7	433	-	2,017	6,691	7,350	2,130	13,928	16,058	12,067
Mobile	11	529	-	8,915	25,223	5,077	8,742	30,473	39,215	14,061
Omaha	5	430	-	8,261	23,709	3,456	8,261	27,165	35,426	4,505
Monterey/Salinas	7	329	-	8,465	24,151	4,307	8,455	28,468	36,923	22,179
Palm Springs	3	242	-	8,309	18,065	1,387	8,309	19,452	27,761	11,193

F-34

PUBLIC STORAGE
SCHEDULE III - REAL ESTATE
AND ACCUMULATED DEPRECIATION
(Amounts in thousands, except number of properties)
		Net	2020	Initial Cost		Costs	Gross Carrying Amount
	No. of	Rentable	Encum-		Buildings &	Subsequent	At December 31, 2020			Accumulated
Description	Facilities	Sq. Feet	brances	Land	Improvements	to Acquisition	Land	Buildings	Total	Depreciation

Evansville	5	326	-	2,340	14,316	1,333	2,312	15,677	17,989	4,248
Dayton	5	284	-	1,074	8,975	4,850	1,073	13,826	14,899	7,522
Augusta	7	392	-	6,213	15,979	4,081	6,213	20,060	26,273	6,765
Fort Wayne	3	168	-	349	3,594	3,194	349	6,788	7,137	5,882
Providence	3	155	-	995	11,206	3,008	995	14,214	15,209	6,866
Huntsville/Decatur	5	298	-	9,161	13,481	3,051	9,108	16,585	25,693	6,089
Shreveport	2	150	-	817	3,030	2,301	741	5,407	6,148	4,851
Springfield/Holyoke	2	144	-	1,428	3,380	1,910	1,427	5,291	6,718	4,913
Rochester	2	99	-	1,047	2,246	2,107	980	4,420	5,400	4,098
Santa Barbara	2	98	-	5,733	9,106	468	5,733	9,574	15,307	5,797
Topeka	2	94	-	225	1,419	2,090	225	3,509	3,734	3,081
Lansing	2	88	-	556	2,882	936	556	3,818	4,374	2,428
Roanoke	3	159	-	2,147	13,801	908	2,147	14,709	16,856	3,141
Flint	1	56	-	543	3,068	260	542	3,329	3,871	1,967
Joplin	1	56	-	264	904	1,014	264	1,918	2,182	1,626
Syracuse	1	55	-	545	1,279	846	545	2,125	2,670	2,032
Modesto/Fresno/Stockton	1	33	-	44	206	983	193	1,040	1,233	862
Commercial and non-operating
real estate			-	13,796	21,761	42,591	14,836	63,312	78,148	41,728
	2,548	175,050	$25,230	$4,313,285	$9,903,429	$3,155,913	$4,375,588	$12,997,039	$17,372,627	$7,152,135
	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