Public Storage (PSA) 10-K risk factor changes: FY2021 vs FY2020

Since our business consists primarily of acquiring, developing, and operating real estate, we are subject to risks related to the ownership and operation of real estate that could result in reduced revenues, increased expenses, increased capital expenditures, or increased borrowings, which could negatively impact our operating results, cash flow available for distribution or reinvestment, and our stock [removed: price:][added: price, including:]

See Note [removed: 13] [added: 14] to our December 31, [removed: 2020] [added: 2021 consolidated] financial statements for a description of the risks of losses that are not covered by third-party insurance contracts.

*Consequences of climate change, including severe weather events, and the steps taken to prevent climate change, could result in increased capital expenditures, increased expenses, and reduced revenues:* Direct and indirect impacts of climate change, such as increased destructive weather events, [added: floods,] fires, [removed: reduced lifespans] and [removed: population reduction, reduced natural habitats, water, food, arable land, and other resources, as well as resulting armed conflicts,] [added: drought] could [added: result in significant damage to our self-storage facilities,] increase our [removed: costs] [added: costs,] or reduce demand for our self-storage facilities.

[removed: Governmental,] [added: These same potential governmental,] political, and [removed: societal] [added: social] pressure could [added: in the future result in] (i) [removed: require] costly changes to [removed: future] newly developed [removed: facilities,] [added: facilities] or [removed: require retrofitting] [added: retrofits] of our existing [removed: facilities,] [added: facilities] to reduce carbon emissions through multiple [removed: avenues] [added: avenues,] including changes to insulation, space configuration, lighting, heating, and air conditioning, (ii) [removed: increase] [added: increased] energy costs as a result of [removed: switching] [added: transitioning] to less carbon-intensive, but more expensive, sources of energy to operate our facilities, and (iii) [removed: result in] consumers reducing their individual carbon footprints by owning fewer durable material consumer goods, collectibles, and other such items requiring storage, resulting in a reduced demand for our self-storage space.

Our property tax expense, which totaled approximately [removed: $297.8] [added: $335.1] million during the year ended December 31, [removed: 2020,] [added: 2021,] generally depends upon the assessed value of our real estate facilities as determined by assessors and government agencies, and accordingly could be subject to substantial increases if such agencies changed their valuation approaches or opinions or if new laws are enacted, especially if new approaches are adopted or laws are enacted that result in increased property tax assessments in states or geographies where we have a high concentration of facilities.

*Development of self-storage facilities can subject us to risks.* At December 31, [removed: 2020,] [added: 2021,] we had a pipeline of development projects totaling [removed: $561.4] [added: $800.0] million (subject to contingencies), and we expect to continue to seek additional development projects.

There are significant risks involved in developing self-storage facilities, such as delays or cost increases due to changes in or failure to meet government or regulatory requirements, failure of revenue to meet our underwriting estimates, [added: delays caused by] weather issues, unforeseen site conditions, or personnel problems.

*Demand for self-storage facilities may be affected by customer perceptions and factors outside of our control.* Significantly lower logistics costs could introduce new competitors such as valet-style storage [removed: services and] [added: services, which may] reduce the demand for traditional self-storage.

If our customers do not feel our properties are safe, they may select competitors for their [removed: self-storage needs, or if there is an industry perception of inadequate security customer use of self-storage could be negatively impacted.][added: self-]

These newly developed facilities are generally of high quality, with a more fresh and vibrant appearance, more amenities such as climate control, more attractive office configurations, newer elements, and a more [removed: imposing and] attractive retail presence as compared to many of our existing stabilized self-storage facilities, some of which were built as much as 50 years ago.

We are not aware of any environmental contamination or moisture infiltration related liabilities [added: at any of our properties] that could be material to our overall business, financial condition, or results of operation.

We own approximately 35% of the common shares of Shurgard, and this investment has a [removed: $341.1] [added: $313.5] million book value and a [removed: $1.4] [added: $2.0] billion market value (based upon the closing trading price of Shurgard’s common stock) at December 31, [removed: 2020.]

We recognized [removed: $15.7] [added: $24.4] million in equity in [removed: earnings,] [added: earnings] and received [removed: $34.9] [added: $41.5] million in [removed: dividends,] [added: dividends] in [removed: 2020,] [added: 2021] with respect to Shurgard.

[removed: *Currency] [added: *•Currency] risks:* Currency fluctuations can impact the fair value of our investment in Shurgard, our equity earnings, our ongoing dividends, and any other related repatriations of cash.

[removed: *Legislative,] [added: *•Legislative,] tax, and regulatory risks:* Shurgard is subject to a variety of local, national, and pan European laws and regulations related to permitting and land use, the environment, labor, and other areas, as well as income, property, sales, value added and employment tax laws.

[removed: *Impediments] [added: *•Impediments] to capital repatriation could negatively impact the realization of our investment in Shurgard:* Laws in Europe and the U.S. may create, impede, or increase our cost to repatriate distributions received from Shurgard or proceeds from the sale of Shurgard’s shares.

[removed: *Risks] [added: *•Risks] of collective bargaining and intellectual property:* Collective bargaining, which is prevalent in certain areas in Europe, could negatively impact Shurgard’s labor costs or operations.

[removed: *Potential] [added: *•Potential] operating and individual country risks:* Economic slowdowns or extraordinary political or social change in the countries in which it operates have posed, and could continue to pose, challenges or result in future reductions of Shurgard’s operating cash flows.

[removed: *Liquidity] [added: *•Liquidity] of our ownership stake:* We have no plans to liquidate our interest in Shurgard.

[removed: *Impediments] [added: *•Impediments] of Shurgard’s public ownership structure:* Shurgard’s strategic decisions, involving activities such as borrowing money, capital contributions, raising capital from third parties, as well as [added: selling or acquiring significant assets, are determined by its board of directors.]

As a result, Shurgard may be precluded from taking advantage of opportunities that we would find attractive but that we may not be able to pursue [removed: economically] separately, or it could take actions that we do not agree with.

We own approximately [removed: 42%] [added: 41%] of the common equity of PSB, and this investment has a [removed: $432.0] [added: $515.3] million book value and a [removed: $1.9] [added: $2.7] billion market value (based upon the closing trading price of PSB’s common stock) at December 31, [removed: 2020.][added: 2021.]

We recognized [removed: $64.8] [added: $207.7] million in equity in earnings, and received [removed: $60.7] [added: $127.3] million in [removed: dividends,] [added: dividends] in [removed: 2020,] [added: 2021] with respect to PSB.

These risks are set forth in PSB’s Form 10-K for the year ended December 31, [removed: 2020,] [added: 2021,] under “Item 1A.

[removed: risk] [added: - risk] of illness or death of our employees or customers;

[removed: continuing] [added: - continuing] negative impacts on the economic conditions in our markets which [removed: have reduced and we expect will continue to] [added: may] reduce the demand for self-storage;

[removed: risk] [added: - risk] that there could be an out-migration of population from certain high-cost major markets, if it is determined that the ability to “work from home,” which has become more prominent during the COVID Pandemic, could allow certain workers to live in less expensive localities, which could negatively impact the occupancies and revenues of our properties in such high-cost major markets;

[removed: continuing,] [added: - continuing,] new or reinstituted government restrictions that (i) limit or prevent use of our facilities, (ii) limit our ability to increase rent or otherwise limit the rent we can charge, (iii) limit our ability to collect rent or evict delinquent tenants, or (iv) limit our ability to complete development and redevelopment projects;

[removed: risk] [added: - risk] that we could experience a change in the move-out patterns of our long-term customers due to economic uncertainty and increases in unemployment as a result of the COVID [removed: Pandemic.][added: Pandemic, which could lead to lower occupancies and rent “roll down” as long-term customers are replaced with new customers at lower rates; and]

[removed: risk] [added: - risk] of negative impacts on the cost and availability of debt and equity capital as a result of the COVID Pandemic, which could have a material impact upon our capital and growth plans.

We believe that the degree to which the COVID Pandemic adversely impacts our business, operating results, cash flows and/or financial condition will be driven primarily by the duration, spread and severity of the pandemic itself, the [removed: speed and] effectiveness of vaccine and treatment developments, [added: including against variants such] as [added: the Delta and Omicron variants, public adoption rates of vaccines, including booster shots, as] well as the duration of indirect economic impacts such as recession, dislocation in capital markets, and job loss, as well as potential longer term changes in [added: consumer behavior, all of which are uncertain and difficult to predict.]

For example, in response to wildfires in 2018 and 2019, the State of California and some localities in California adopted temporary regulations that imposed certain limits on the rents we could charge at certain of our facilities and the extent to [added: which] we could increase rents to existing tenants.

Approximately [removed: 64%] [added: 63%] of our new storage customers in [removed: 2020] [added: 2021] were sourced directly or indirectly through “unpaid” search and “paid” search campaigns on Google.

[removed: We believe that the] vast majority of customers searching for self-storage use Google at some stage in their shopping experience.

We have [removed: over 5,400] [added: approximately 5,800] employees, [removed: more than 1.6] [added: 1.8] million customers, and we conduct business at facilities with [removed: 175] [added: 198] million net rentable square feet of storage space.

The impact of any such legal claims, proceedings, and regulatory enforcement actions [removed: and] could negatively impact our operating results, cash flow available for distribution or reinvestment, and/or the price of our common shares.

The failure or disruption of our computer and communications systems could significantly harm our [removed: business.][added: business.]

These systems are subject to damage or interruption from power outages, computer and telecommunications failures, hackers, [added: including through a ransomware attack,] computer worms, viruses and other destructive or disruptive security breaches and catastrophic events.

[removed: Although we believe we have taken commercially reasonable] steps to protect the security of our confidential information, information security risks have generally increased in recent years due to the rise in new technologies and the increased sophistication and activities of perpetrators of cyberattacks.

We may not effectively or appropriately identify ready-now succession candidates for [added: our] CEO and executive management team which may negatively impact our ability to meet key strategic goals.

Consistent with our commitment to sustainability in our business operations, we have undertaken a number of initiatives to reduce emissions and energy consumption, water usage, and waste, including through our Property of Tomorrow program, pursuant to which we are upgrading all of our older properties by the end of 2025, which has already resulted in investment of approximately

$230 million in improvements through December 31, 2021.

Governmental, political, and societal pressure, including expectations of institutional and activist investors and other interest groups, could require us to accelerate our initiatives and, with it, the costs of their implementation.

storage needs, or if there is an industry perception of inadequate security generally, customer use of self-storage could be negatively impacted.

2021.

- risk that future waves of infection, including those resulting from new variants, such as Delta or Omicron, or from additional pandemics, could result in new or reinstituted government restrictions;

We believe that the

Although we believe we have taken commercially reasonable

For any year we fail to qualify as a REIT, unless certain relief provisions apply (the granting of such relief could nonetheless result in significant

We cannot predict whether, when, or to what extent new federal tax laws, regulations, interpretations or rulings will be adopted, but these changes might include, in particular, increases in the U.S. federal income tax rates that apply to us or our shareholders in certain circumstances, possibly with retroactive effect.

topics.

selling or acquiring significant assets, are determined by its board of directors.

risk that even after the initial restrictions due to the COVID Pandemic ease, they could be reinstituted in case of future waves of infection or if additional pandemics occur;

This could lead to lower occupancies and rent “roll down” as long-term customers are replaced with new customers at lower rates; and

consumer behavior, all of which are uncertain and difficult to predict.

The Hughes Family could significantly influence us and take actions adverse to other shareholders.

At December 31, 2020, B.

Wayne Hughes, our former Chairman and his family, which includes his daughter, Tamara Hughes Gustavson, a current member of our Board of Trustees (our “Board”), and his son, B.

Wayne Hughes, Jr., a former member of the Board who retired effective December 31, 2020, (collectively, the “Hughes Family”), owned approximately 13.0% of our aggregate outstanding common shares.

Our declaration of trust permits the Hughes Family to own up to 35.66% of our outstanding common shares while it generally restricts the ownership by other persons and entities to 3% of our outstanding common shares unless our Board grants an ownership waiver, as has occurred in certain cases for large mutual fund companies.

Consequently, the Hughes Family may significantly influence matters submitted to a vote of our shareholders, including electing trustees, amending our organizational documents, dissolving and approving other extraordinary transactions, such as a takeover attempt, which may result in an outcome that may not be favorable to other shareholders.

take, or refrain from taking, other actions that could have the effect of delaying, deterring or preventing a transaction or a change in control.

unidentified issues in prior periods, or changes in our circumstances, as well as share ownership limits in our articles of incorporation that do not necessarily ensure that our shareholder base is sufficiently diverse for us to qualify as a REIT.

We cannot predict whether, when, or to what extent new federal tax laws, regulations, interpretations or rulings will be adopted.

Any legislative action may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect taxation of us or our shareholders.

sales, at the city, county, state, and federal level, which could materially impact our business and operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our [added: consolidated] financial statements and notes thereto.

Critical Accounting [removed: Policies][added: Estimates]

We believe the following are our critical accounting [removed: policies,] [added: estimates,] because they [added: are reasonably likely to] have a material impact on the portrayal of our financial condition and results, and they require us to make judgments and estimates about matters that [removed: are inherently uncertain.][added: involve a significant level of uncertainty.]

Impairment of Long-Lived Assets: The analysis of impairment of our long-lived [removed: assets] [added: assets, including our real estate facilities,] involves identification of indicators of impairment, [added: including unfavorable operational results and significant cost overruns on construction,] projections of future operating cash flows, and estimates of fair values, all of which require significant judgment and subjectivity.

Allocating Purchase Price for Acquired Real Estate [removed: Facilities:] [added: Facilities:] We estimate the fair values of [added: the assets and liabilities of acquired real estate facilities, which consist principally of] land and [removed: buildings] [added: buildings,] for purposes of allocating the aggregate purchase price of acquired [removed: properties.][added: real estate facilities.]

[removed: We] [added: For individual and small portfolio acquisitions, we] estimate the fair value of [removed: acquired] buildings [removed: by determining] [added: primarily based upon] the [added: estimated] current [added: replacement cost, which we calculate by estimating the replacement] cost [removed: to build] [added: of] new purpose-built self-storage facilities in [removed: the same location,] [added: similar geographic regions] and adjusting [removed: those costs] for [removed: the actual] age, quality, [removed: condition,] amenities, and configuration [removed: of] [added: associated with] the buildings acquired.

Others could come to materially different conclusions as to the estimated fair [removed: values,] [added: values of land and buildings,] which would result in different depreciation and amortization expense, gains and losses on sale of real estate assets, as well as the level of land and buildings on our [added: consolidated] balance sheet.

[removed: Our self-storage operations generate most] [added: Analysis] of [removed: our net income.][added: Net Income - Self-Storage Operations]

Our [added: self-storage operations generate most of our net income and our] earnings growth is most impacted by the level of organic growth [removed: in] [added: within] our Same Store [removed: Facilities’ revenues.][added: Facilities (as defined below).]

Accordingly, a significant portion of management’s time is devoted to maximizing cash flows from our existing self-storage [removed: facilities.][added: facility portfolio.]

[removed: During the years ended December 31, 2020 and 2019, revenues] [added: Revenues] generated by our Same Store Facilities [removed: decreased by 1.0% and] increased [removed: by 1.5%, respectively,] [added: 10.5% in 2021 and decreased 0.8% in 2020, in each case] as compared to the previous year.

In addition to managing our existing facilities for organic growth, we have grown and plan to continue to grow through the acquisition and development of new facilities and [removed: expanding] [added: expansion of] our existing self-storage facilities.

In order to enhance the competitive position of certain of our facilities relative to local competitors (including newly developed [removed: “fifth generation” facilities),] [added: facilities) and execute on our climate initiatives and long-term sustainability strategies,] we have embarked on [removed: a] [added: our] multi-year [added: Property of Tomorrow] program to [added: (i)] rebrand our [removed: properties, in order to develop] [added: properties through] more pronounced, attractive, and clearly identifiable color schemes and signage, [removed: as well as to] [added: (ii) enhance the energy efficiency of our properties, and (iii)] upgrade the configuration and layout of the offices and other customer zones to improve the customer experience.

In 2020, net income allocable to our common shareholders was $1,098.3 million or $6.29 per diluted common share, compared to $1,272.8 million or $7.29 per diluted common share in [removed: 2019] [added: 2019,] representing a decrease of $174.4 million or $1.00 per diluted common share.

The decrease is due primarily to (i) a $105.8 million [removed: decrease due to the impact of] [added: increase in] foreign currency exchange [removed: gains and] losses associated with our Euro denominated [removed: debt,] [added: notes payable,] (ii) a $40.3 million increase in depreciation and amortization expense, (iii) a $21.1 million increase in general and administrative expense, (iv) a $15.6 million decrease due to the impact of allocations to preferred shareholders with respect to redemption of preferred shares, and (v) a $8.0 million decrease in self-storage net operating income.

The $8.0 million decrease in self-storage net operating income is a result of a [removed: $41.7] [added: $39.4] million decrease in our Same Store [removed: Facilities (as defined below),] [added: Facilities,] offset partially by a [removed: $33.7] [added: $31.4] million increase in our non-Same Store [removed: Facilities (as defined below).][added: Facilities.]

Revenues for the Same Store Facilities decreased [removed: 1.0%] [added: 0.8%] or [removed: $23.7] [added: $20.7] million in 2020 as compared to 2019, due primarily to reduced late charges and administrative fees.

Cost of operations for the Same Store Facilities increased by 2.7% or [removed: $18.1] [added: $18.8] million in 2020 as compared to 2019, due primarily to a [removed: 22.5% ($11.0] [added: 22.6% ($11.4] million) increase in marketing expenses, a [removed: 3.1% ($7.4] [added: 3.0% ($7.6] million) increase in property tax expense, and a [removed: 2.5% ($3.1] [added: 2.3% ($2.9] million) increase in on-site property manager payroll expense.

The increase in net operating income of [removed: $33.7] [added: $31.4] million for the non-Same Store Facilities is due primarily to the impact of facilities acquired in 2020 and 2019 and the fill-up of recently developed and expanded facilities.

Operating [removed: results] [added: Results] for [removed: 2019] [added: 2021] and [removed: 2018][added: 2020]

In [removed: 2019,] [added: 2021,] net income allocable to our common shareholders was [removed: $1,272.8] [added: $1,732.4] million or [removed: $7.29] [added: $9.87] per diluted common share, compared to [removed: $1,488.9] [added: $1,098.3] million or [removed: $8.54] [added: $6.29] per diluted common share in [removed: 2018] [added: 2020] representing [removed: a decrease] [added: an increase] of [removed: $216.1] [added: $634.1] million or [removed: $1.25] [added: $3.58] per diluted common share.

The [removed: $34.3] [added: $437.4] million increase in self-storage net operating income [added: in 2021 as compared to 2020] is a result of a [removed: $9.9] [added: $276.9] million increase in our Same Store [removed: Facilities] [added: Facilities,] and [removed: $24.4] [added: a $160.5] million increase in our [removed: non-Same] [added: Non-Same] Store [removed: Facilities.][added: Facilities (as defined below).]

Revenues for the Same Store Facilities increased [removed: 1.5%] [added: 10.5%] or [removed: $36.7] [added: $262.7] million in [removed: 2019] [added: 2021] as compared to [removed: 2018,] [added: 2020,] due primarily to higher realized annual rent per [removed: occupied] [added: available] square [removed: foot.][added: foot and weighted average square foot occupancy.]

Cost of operations for the Same Store Facilities [removed: increased] [added: decreased] by [removed: 4.2%] [added: 2.0%] or [removed: $26.9] [added: $14.2] million in [removed: 2019] [added: 2021] as compared to [removed: 2018,] [added: 2020,] due primarily to [added: (i)] a [removed: 47.1% ($15.7] [added: 36.1% ($22.4] million) [removed: increase] [added: decrease] in marketing expenses and [removed: increased] [added: (ii) an 11.2% ($14.4 million) decrease in on-site] property [removed: taxes.][added: manager payroll.]

The increase in net operating income of [removed: $24.4] [added: $160.5] million for the [removed: non-Same] [added: Non-Same] Store Facilities is due primarily to the impact of facilities acquired in [removed: 2019] [added: 2021] and [removed: 2018] [added: 2020] and the fill-up of recently developed and expanded facilities.

FFO is not a substitute for net cash flow in evaluating our liquidity or ability to pay dividends, because it excludes investing and financing [added: activities presented on our consolidated statements of cash flows.]

For the year ended December 31, [removed: 2020,] [added: 2021,] FFO was [removed: $9.75] [added: $13.36] per diluted common share, as compared to [removed: $10.58] [added: $9.75] and [removed: $10.45] [added: $10.58] per diluted common share for the years ended December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively, representing [removed: a decrease] [added: an increase] in [removed: 2020] [added: 2021] of [removed: 7.8%,] [added: 37.0%] or [removed: $0.83] [added: $3.61] per diluted common share, as compared to [removed: 2019.][added: 2020.]

| | | [added: |] Year Ended December 31, | | | | | | | | [added: | | | | | | |]

| | | [added: | 2021 | | | | | |] 2020 | | | [removed: 2019] | | | [removed: 2018] [added: 2019] | | [added: |]

| | | [added: |] (Amounts in thousands, except per share data) | | | | | | | | [added: | | | | | | |]

| Reconciliation of Diluted Earnings per Share [removed: to] [added: to FFO per Share:] | | | | | | | | | | [added: | | | | | | | |]

| [removed: FFO] [added: Computation of FFO] per Share: | | | | | | | | | | [added: | | | | | | | |]

| Diluted Earnings per Share | | [added: |] $ | [removed: 6.29] [added: 9.87] | | [added: | | |] $ | [removed: 7.29] [added: 6.29] | | [added: | | |] $ | [removed: 8.54] [added: 7.29] | [added: |]

| Eliminate amounts per share excluded from FFO: | | | | | | | | | | [added: | | | | | | | |]

| Depreciation and amortization | | | [added: 4.44 | | | | | |] 3.53 | | | [removed: 3.32] | | | [removed: 3.21] [added: 3.32] | [added: | |]

| FFO per share | | [added: |] $ | [removed: 9.75] [added: 13.36] | | [added: | | |] $ | [removed: 10.58] [added: 9.75] | | [added: | | |] $ | [removed: 10.45] [added: 10.58] | [added: |]

| [removed: Computation] [added: Reconciliation] of FFO per [added: Share to Core FFO per] Share: | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Net income allocable to common shareholders | | [added: |] $ | [removed: 1,098,335] [added: 1,732,444] | | [added: | | |] $ | [removed: 1,272,767] [added: 1,098,335] | | [added: | | |] $ | [removed: 1,488,900] [added: 1,272,767] | [added: |]

| Eliminate items excluded from FFO: | | | | | | | | | | [added: | | | | | | | |]

| Depreciation and amortization | | | [added: 709,349 | | | | | |] 549,975 | | | [removed: 511,413] | | | [removed: 483,646] [added: 511,413] | [added: | |]

The preparation of consolidated financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“GAAP”) requires us to make judgments, assumptions, and estimates that affect the amounts reported.

On an ongoing basis, we evaluate our estimates and assumptions.

These estimates and assumptions are based on current facts, historical experience, and various other factors that we believe are reasonable under the circumstances to determine reported amounts of assets, liabilities, revenues, and expenses that are not readily apparent from other sources.

In particular, these estimates are sensitive to significant assumptions, such as the projections of future rental rates, stabilized occupancy level, future profit margin, discount rates and capitalization rates, all of which could be affected by our expectations about future market or economic conditions.

We estimate the fair value of land based upon price per square foot derived from observable transactions involving comparable land in similar locations as adjusted for location quality, parcel size, and date of sale associated with the acquired facilities.

The fair value estimate of land is sensitive to the adjustments made to the land market transactions used in the estimate, particularly when there is a lack of recent

comparable land market data.

For large portfolio acquisitions, we estimate the fair value of buildings primarily using the income approach by estimating the fair value of hypothetical vacant acquired facilities and adjusting for the estimated fair value of land.

The fair value estimate of buildings is sensitive to assumptions used in both the income approach, such as lease-up period, future stabilized operating cash flows, capitalization rate and discount rate, and in the replacement cost approach, such as current cost adjustment, soft cost and developer profit estimate.

During the year ended December 31, 2021, revenues generated by our Same Store Facilities increased by 10.5%, as compared to the previous year, while Same Store cost of operations decreased by 2%.

Demand and operating trends have continued to improve, leading to increases in our self-storage rental rates and reduction in advertising expense in all markets while maintaining high levels of occupancy.

During 2021, we acquired a near-record high of 232 facilities with 21.8 million net rentable square feet for $5.1 billion.

In addition, we developed and expanded self-storage space for a total cost of $218.0 million, adding 1.6 million net rentable square feet.

During the year ended December 31, 2021, revenue generated by our acquired and newly developed and expanded facilities increased by 112.9% as compared to the previous year.

Our strong financial profile continues to enable effective access to capital markets in order to support our growth.

During 2021, we raised an aggregate of $5.1 billion in four public debt offerings, resulting in aggregate notes payable of $7.5 billion with a weighted average rate of 1.8% at December 31, 2021.

Additionally, during 2021, we issued $1.2 billion in three public offerings of our preferred shares offset by $1.2 billion in redemptions of our preferred shares, reducing our weighted average dividend rate from 4.8% at December 31, 2020 to 4.5% at December 31, 2021.

We expect to complete the program by the end of 2025.

We spent approximately $130 million on the program in 2021 and expect to spend approximately $180 million in 2022.

The increase is due primarily to (i) a $437.4 million increase in self-storage net operating income, (ii) a $209.7 million increase in foreign currency exchange gains associated with our Euro denominated notes payable, and (iii) our $149.0 million equity share of gains on sale of real estate recorded by PS Business Parks in 2021, partially offset by (iv) a $160.2 million increase in depreciation and amortization expense.

| Gains on sale of real estate investments, including our equity share from investments | | | (0.95) | | | | | | (0.07) | | | | | | (0.03) | | |

| Gains on sale of real estate investments, including our equity share from investments | | | (165,272) | | | | | | (12,791) | | | | | | (5,896) | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | (Amounts in thousands, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Preferred share redemption charge (a) | | | 0.18 | | | | | | 0.28 | | | | | | | | | | | | 0.28 | | | | | | 0.21 | | | | | | | | |

| Property losses and tenant claims due to casualties (b) | | | 0.03 | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Reconciliation of FFO to Core FFO: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| FFO allocable to common shares | | | $ | 2,345,835 | | | | | $ | 1,702,350 | | | | | 37.8 | | % | | | | $ | 1,702,350 | | | | | $ | 1,845,801 | | | | | (7.8) | | % |

| Eliminate the impact of items excluded from Core FFO, including our equity share from investments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Foreign currency exchange (gain) loss | | | (111,787) | | | | | | 97,953 | | | | | | | | | | | | 97,953 | | | | | | (7,829) | | | | | | | | |

| Preferred share redemption charge (a) | | | 31,604 | | | | | | 48,265 | | | | | | | | | | | | 48,265 | | | | | | 37,246 | | | | | | | | |

| Property losses and tenant claims due to casualties (b) | | | 4,909 | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | |

| Other items | | | (543) | | | | | | 4,412 | | | | | | | | | | | | 4,412 | | | | | | 255 | | | | | | | | |

| Core FFO allocable to common shares | | | $ | 2,270,018 | | | | | $ | 1,852,980 | | | | | 22.5 | | % | | | | $ | 1,852,980 | | | | | $ | 1,875,473 | | | | | (1.2) | | % |

| Diluted weighted average common shares | | | 175,568 | | | | | | 174,642 | | | | | | | | | | | | 174,642 | | | | | | 174,530 | | | | | | | | |

| Core FFO per share | | | $ | 12.93 | | | | | $ | 10.61 | | | | | 21.9 | | % | | | | $ | 10.61 | | | | | $ | 10.75 | | | | | (1.3) | | % |

Our MD&A discusses our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), and are affected by our judgments, assumptions and estimates.

The notes to our December 31, 2020 financial statements, primarily Note 2, summarize our significant accounting policies.

Income Tax Expense: We have elected to be treated as a REIT, as defined in 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 evaluation that we have met the REIT requirements could be incorrect, because compliance with the tax rules requires factual determinations, and circumstances we have not identified could result in noncompliance with the tax requirements in current or prior years.

For any taxable year that we fail to qualify as a REIT and for which applicable statutory relief provisions did not apply, we would be taxed at the regular corporate rates on all of our taxable income for at least that year and the ensuing four years, we could be subject to penalties and interest, and our net income would be materially different from the amounts estimated in our financial statements.

In addition, certain of our consolidated corporate subsidiaries have elected to be treated as TRSs for U.S. federal corporate income tax purposes, which are taxable as regular corporations and subject to certain limitations on intercompany transactions.

If tax authorities determine that amounts paid by our TRSs to us are not reasonable compared to similar arrangements among unrelated parties, we could be subject to a 100% penalty tax on the excess payments.

Such a penalty tax could have a material adverse impact on our net income.

Accrual for Uncertain and Contingent Liabilities: We accrue for certain contingent and other liabilities that have significant uncertain elements, such as property taxes, workers compensation claims, tenant reinsurance claims, as well as other legal claims and disputes involving customers, employees, governmental agencies and other third parties.

We estimate such liabilities based upon many factors such as assumptions of past and future trends and our evaluation of likely outcomes.

However, the estimates of known liabilities could be incorrect or we may not be aware of all such liabilities, in which case our accrued liabilities and net income could be misstated.

The related estimation processes involve significant judgment.

We estimate the fair value of acquired land by considering the most directly comparable recently transacted land sales (“Land Comps”) and adjusting the transacted values for differentials to the acquired land such as location quality, parcel size, and date of sale, in order to derive the estimated value of the underlying acquired land.

These adjustments to the Land Comps require significant judgment, particularly when there is a low volume of Land Comps or the available Land Comps lack similarity to the acquired property in proximity, date of sale, or location quality.

During a significant portion of 2020, the COVID Pandemic has resulted in cessation, severe curtailment, or impairment of business activities in most sectors of the economy in virtually all markets we operate in, due to governmental “stay at home” orders, risk mitigation procedures, closure of businesses not considered to be “essential,” as well as other direct and indirect impacts, including a rapid and dramatic increase in unemployment in the U.S. While in certain markets, initial government restrictions were eased in response to reductions in the rate of new infections, there have been increases in the rate of infection in certain markets from time to time and re-imposition of certain restrictions.

These restrictions as well as public concerns about the COVID Pandemic continue to have an ongoing negative impact the economy, with unemployment continuing to be at high levels.

Our self-storage facilities have been classified as “essential” businesses under all applicable business closure orders and thus remained open to all customer activity.

We consider the safety of our employees and customers as our first priority, and have accordingly taken significant steps to ensure safety while keeping our services available to the public.

These steps include initiating our touchless eRental® leasing platform, touchless mobile app allowing customer access to our properties, enforcing social distancing requirements in our property offices and grounds, and providing protective equipment, including face coverings, gloves, and plastic barriers.

Our corporate offices as well as our call centers migrated to a “work from home” environment during the COVID Pandemic.

We expect our corporate employees to return to the corporate office assuming the risk of the COVID Pandemic continues to recede.

However, we expect that our call centers will remain in a “work from home”

environment due to certain favorable aspects of a distributed call center team.

We believe these changes have not resulted in any significant negative impacts to our operations or decision making.

It is possible that stricter government restrictions, including stay at home orders, could be instituted or reinstituted in response to increases in infections, the aggregate effect of the COVID Pandemic and seasonal influenza infections, or if additional pandemics occur.

We cannot estimate the extent of the COVID Pandemic’s future negative impacts.

The negative impacts of the COVID Pandemic are described more fully below, as well as throughout our MD&A which follows.

Revenue growth in each year was impacted by increased competition from newly developed facilities.

The decrease in revenue in the year ended December 31, 2020 included the negative impact caused by the COVID Pandemic including restrictions on rate increases to tenants imposed by local government due to “States of Emergency.” Our trends in revenue have improved in the last half of 2020, with revenues from our Same Store Facilities increasing 0.8% during the three months ended December 31, 2020 as compared to the three months ended December 31, 2019.

At December 31, 2020, as compared to December 31, 2019, occupancies for our Same Store Facilities was 2.7% higher, while the contract rent per occupied foot was essentially flat, suggesting continued revenue growth into early 2021.

See “Self-storage Operations – Same Store Operations” for further information with respect to our same-store operations, including potential downside risks to our expectations.

In the three years ended December 31, 2020, we acquired a total of 131 facilities with 9.9 million net rentable square feet from third parties for approximately $1.4 billion, and we opened newly developed and expanded self-storage space for a total cost of $866.1 million, adding approximately 7.9 million net rentable square feet.

The timing and scope of the program will evolve as the work is executed and we evaluate its impact.

The cost of this program is included in “capital expenditures to maintain our real estate facilities” on our statements of cash flow, and the program is discussed more fully in “Liquidity and Capital Resources – Capital Expenditure Requirements” below.

See “Liquidity and Capital Resources” for further information regarding our capital requirements and anticipated sources of capital to fund such requirements.

The decrease is due primarily to (i) $183.1 million in aggregate gains due to Shurgard’s initial public offering and the sale of our facility in West London to Shurgard in October 2018, (ii) our $37.7 million equity share of gains recorded by PS Business Parks during 2018, (iii) a $10.3 million decrease due to the impact of foreign currency exchange gains associated with our euro denominated debt and (iv) a $32.7 million allocation to our preferred shareholders associated with our preferred share redemption activities in 2019.

These impacts were offset partially by a $34.3 million increase in self-storage net operating income (described below) and a reduction in general and administrative expense attributable to $30.7 million in incremental share-based compensation expense in 2018 for the planned retirement of our former CEO and CFO.

Our debt is our only market-risk sensitive portion of our capital structure, which totals approximately [removed: $2.5] [added: $7.5] billion [removed: and represents 29.7% of the book value of our equity] at December 31, [removed: 2020.][added: 2021.]

We have foreign currency exposure at December 31, [removed: 2020] [added: 2021] related to (i) our investment in Shurgard, with a book value of [removed: $341.1] [added: $313.5] million, and a fair value of [removed: $1.4] [added: $2.0] billion based upon the closing price of Shurgard’s stock on December 31, [removed: 2020,] [added: 2021,] and (ii) [removed: €842.0 million ($1.0] [added: €1.5 billion ($1.7] billion) of Euro-denominated unsecured notes [removed: payable.][added: payable, providing a natural hedge against the fair value of our investment in Shurgard.]

The fair value of our [removed: fixed rate] debt at December 31, [removed: 2020] [added: 2021] is approximately [removed: $2.8] [added: $7.6] billion.

The table below summarizes the annual maturities of our [removed: fixed rate] debt, which had a weighted average effective rate of [removed: 2.4%] [added: 1.8%] at December 31, [removed: 2020.][added: 2021.]

See Note [removed: 6] [added: 7] to our December 31, [removed: 2020] [added: 2021 consolidated] financial statements for further information regarding our [removed: fixed rate] debt (amounts in thousands).

| | | [removed: 2021] | [added: 2022] | | | [removed: 2022] | | | 2023 | | | [added: | | |] 2024 | | | [added: | | |] 2025 | | | [added: | | | 2026 | | | | | |] Thereafter | | | [added: | | |] Total | [added: | |]

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Debt | | | $ | 502,483 | | | | | $ | 19,219 | | | | | $ | 813,555 | | | | | $ | 274,649 | | | | | $ | 1,150,138 | | | | | $ | 4,762,361 | | | | | $ | 7,522,405 | |

| | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | |

| Fixed rate debt | | $ | 1,851 | | $ | 502,574 | | $ | 19,219 | | $ | 122,770 | | $ | 296,952 | | $ | 1,614,563 | | $ | 2,557,929 |

[removed: Forward] [added: Cautionary Statement Regarding Forward] Looking Statements

All statements in this document, other than statements of historical fact, are forward-looking statements [removed: which] [added: and] may be identified by the use of the words "expects," "believes," "anticipates," "should," "estimates" and similar expressions.

[removed: Factors] [added: Risks] and [removed: risks] [added: uncertainties] that may impact future results and performance include, but are not limited to, those described in Part 1, Item 1A, "Risk Factors" [added: of this report] and in our other filings with the Securities and Exchange Commission (the “SEC”).

All of our forward-looking statements, including those in this report, are qualified in their entirety by this [added: cautionary] statement.

We are the largest owner and operator of self-storage facilities in the [removed: U.S.] [added: United States ("U.S.")] with physical presence in most major markets and [removed: 38] [added: 39] states.

At December 31, [removed: 2020,] [added: 2021,] we held interests in and consolidated [removed: 2,548] [added: 2,787] self-storage facilities (an aggregate of [removed: 175] [added: 198] million net rentable square feet of space) operating under the [removed: “Public Storage” brand] [added: Public Storage®] name.

[removed: Ancillary and] Other Operations:

We reinsure all risks in this [removed: program,] [added: program] but purchase insurance from an independent third party insurer to cover this exposure for a limit of $15.0 million for losses in excess of $5.0 million per occurrence.

At December 31, [removed: 2020,] [added: 2021,] there were approximately [removed: 990,000] [added: 1.2 million] certificates [added: of insurance] held by our self-storage customers, representing aggregate coverage of approximately [removed: $3.9] [added: $4.9] billion.

At December 31, [removed: 2020,] [added: 2021,] we managed [removed: 92] [added: 93] facilities for third parties, and [removed: are] [added: were] under contract to manage [removed: 25] [added: 59] additional facilities including [removed: 24] [added: 54] facilities that are currently under construction.

We hold a [removed: 42%] [added: 41%] equity interest in PS Business Parks, Inc. (“PSB”) and a 35% interest in Shurgard Self Storage SA (“Shurgard”).

PSB is a publicly held REIT [added: traded on the NYSE under the "PSB" symbol] that owns, operates, acquires and develops commercial properties, primarily multi-tenant flex, office, and industrial parks.

At December 31, [removed: 2020,] [added: 2021,] PSB owned and operated [removed: 27.7] [added: 28] million rentable square feet of commercial space.

[added: At December 31, 2021,] Shurgard [removed: is a public company traded on Euronext Brussels under the “SHUR” symbol] [added: owned] and [removed: owns 241] [added: operated 253] self-storage facilities [removed: (13.2] [added: (14] million net rentable square feet) located in seven countries in Western Europe [removed: operated] under the [removed: “Shurgard” brand] [added: Shurgard®] name.

We report annually to the SEC on Form 10-K, which includes [added: consolidated] financial statements certified by our independent registered public accountants.

We also report quarterly to the SEC on Form 10-Q, which includes unaudited [added: consolidated] financial statements.

On our website, www.publicstorage.com, we make available, free of charge, our [removed: Annual Reports] [added: annual reports] on Form [removed: 10- K,] [added: 10-K,] quarterly reports on Form 10-Q, current reports on Form 8-K, [added: definitive proxy statements,] and [added: other reports required to be filed with the SEC, as well as] all amendments to those reports as soon as reasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC.

As the largest owner of self-storage facilities, we believe that we own approximately [removed: 7%] [added: 9%] of the self-storage square footage in the U.S. and that collectively the five largest self-storage owners in the U.S. own approximately [removed: 16%,] [added: 19%,] with the remaining [removed: 84%] [added: 81%] owned by regional and local operators.

Over the past few years we have invested in technologies that we believe have enabled us to operate and compete more [removed: effectively.][added: effectively by providing customers with a modern digital experience.]

Centralized information networks: Our centralized reporting and information network enables us to identify changing market conditions and operating trends as well as analyze customer data and, on an automated basis, quickly change each of our individual [removed: properties’] [added: property’s] pricing and promotions, as well as to drive marketing spending such as the relative level of bidding for various paid search terms on paid search engines.

[removed: Our] [added: - Our] Desktop and Mobile Websites: The online marketing channel is a key source of customers.

Approximately 76% of our move-ins in [removed: 2020] [added: 2021] were sourced through our website and we believe that many of our other customers who reserved directly through our [removed: call] [added: customer care] center or arrived at a facility and [removed: moved in without a reservation, have reviewed our pricing and availability online through our websites.]

Customers reach our [removed: call] [added: customer care] center by calling our advertised toll-free telephone numbers provided on search [removed: engines] [added: engines, from our website, the Public Storage App,] or [added: from] our [removed: website.][added: in-store kiosks.]

We believe giving customers the option to interact with a [removed: call center] [added: live] agent, despite the higher marginal cost relative to a reservation made on our website, enhances our ability to close sales with potential [removed: customers.][added: customers and results in greater satisfaction.]

[removed: Our] [added: - Our] Properties: Customers can also shop at any one of our facilities.

Property managers access the same information that is available on our website and to our [removed: call] [added: customer care] center [removed: agents,] [added: agents] and can inform the customer of available space at that site or [added: at] our other nearby storage facilities.

[added: eRental® move-in process:] To further enhance the move-in experience, in 2020 we initiated our “eRental®” process whereby prospective tenants (including those who initially reserved a space) [removed: expedite the move-in process by executing a lease] [added: are able to execute their rental] agreement from their smartphone or computer and then [removed: going] [added: go] directly to their space on the move-in date.

Approximately half of customers elected this “eRental®” process during [removed: the fourth quarter of 2020.][added: 2021.]

Our ongoing growth strategies consist of: (i) improving the operating performance of our existing self-storage facilities, (ii) acquiring and developing [removed: facilities,] [added: facilities and] (iii) growing ancillary business activities including tenant reinsurance and third-party management [removed: services, and (iv) leveraging the growth of our investment in PSB and Shurgard.][added: services.]

We maximize revenues through striking the appropriate balance between occupancy and rates to new and existing [removed: tenants,] [added: tenants] by regularly adjusting (i) our promotional and other discounts, (ii) the rental rates we charge to new and existing customers, and (iii) our marketing spending and intensity.

We inform these pricing and marketing decisions by observing their impact on web and [removed: call] [added: customer care] center traffic, reservations, move-ins, move-outs, tenant length of stay, and other indicators of response.

Acquire existing [removed: properties in the U.S.:] [added: properties:] We seek to capitalize on the fragmentation of the self-storage business through acquiring attractively priced, well-located existing self-storage facilities.

Data on the rental rates and occupancy levels of our existing facilities provide us an advantage in evaluating the potential of [removed: acquisition opportunities.]

We plan to increase our development activity [removed: given] [added: when] attractive risk adjusted return profile with yields above those of acquisitions.

Grow ancillary business activities: We pursue growth initiatives [removed: providing attractive] [added: aimed at increasing our] insurance [removed: offerings] [added: offering coverage] for tenants who choose to protect their stored items against loss and desire to maximize their storage experience.

Our third party management business enables us to generate revenues through management fees, expand our presence, increase our economies of scale, promote our [removed: brand] [added: brand,] and enhance our ability to acquire additional facilities over the medium and long-term as a result of strategic relationships forged with third-party owners.

[removed: We] [added: Aside from the regulations discussed therein, we] are not aware of any government regulations that have resulted or that we expect will result in compliance costs that had or will have a material effect on our capital expenditures, earnings or competitive position.

We are committed to a long-term environmental stewardship program that reduces emissions of hazardous materials into the environment and the remediation of identified existing environmental concerns, including [added: environmentally-friendly capital initiatives and building and operating properties with a high structural resilience and low obsolescence.]

[removed: The Company’s] [added: In order to maintain a strong foundation, our] key human capital management objectives are to attract, [removed: develop] [added: develop,] and retain the highest quality talent.

While most [added: of our employees] join without experience in the self-storage industry, many find career success with us given our emphasis on training, [removed: development] [added: development,] and promotion from within.

These include changes in demand for our facilities, impacts of natural disasters, adverse changes in laws and regulations including governing property tax, evictions, rental rates, minimum wage levels and insurance, adverse economic effects from the COVID-19 Pandemic or similar public health events, increases in the costs of our primary customer acquisition channels, unfavorable foreign currency rate fluctuations, changes in federal or state tax laws related to the taxation of REITs, security breaches, including ransomware, or a failure of our networks, systems or technology.

Our customers have the option of purchasing insurance from a non-affiliated insurance company to cover certain losses to their goods stored at our facilities, as well as those we manage for third parties.

A wholly-owned, consolidated subsidiary of Public Storage fully reinsures such policies and thereby assumes all risk of losses under these policies and receives reinsurance premiums substantially equal to the premiums collected from our tenants, from the non-affiliated insurance company.

Shurgard is a public company traded on Euronext Brussels under the “SHUR” symbol.

We believe our Public Storage® brand awareness is a competitive advantage in acquiring customers relative to other self-storage operators.

moved in without a reservation, have reviewed our pricing and availability online through our websites.

- Our Customer Care Center: Our customer care center is staffed by skilled sales specialists and customer service representatives.

In 2021, we added live internet chat capability as another channel for our customers to engage our agents, cost effectively improving customer responsiveness.

We are expanding the use of in-store kiosks to give customers the options of a full self-service experience or a two-way video assisted service via our existing customer care center.

Public Storage App: During the fourth quarter of 2020, we implemented an industry leading customer smartphone application.

The Public Storage App provides our customers with digital access to our properties, as well as payment and other account management functions.

acquisition opportunities.

Refer to Item 1A, “Risk Factors” below for a discussion of certain risks related to government regulations, including risks related to environmental regulations, emergency regulations adopted in response to the COVID Pandemic or wildfires that restrict access to our facilities or the rents we can charge our customers, wage regulations, income tax regulations including relating to REIT qualification, and property tax regulations.

Our employees are the foundation of our business and fundamental to our ability to execute our corporate strategies and build long-term value for our stakeholders.

We achieve these objectives by committing to our employees to provide a diverse and inclusive workplace, regular and open communication, competitive and supportive compensation and benefits programs, and opportunities for career growth and development.

Together with our core values of doing the right thing and integrity in all that we do, which serve as the cornerstone of our corporate culture, we believe that this commitment facilitates employee engagement and their commitment to Public Storage.

The following is an overview of our key programs and initiatives focused on attracting, developing, and retaining the highest quality talent:

In 2021, our Chief Executive Officer signed the CEO Action for Diversity & Inclusion pledge, reflecting our commitment to foster an environment where everyone feels valued, included, engaged, and excited to be part of our best-in-class team.

We began implementing the pledge throughout the year, including with unconscious bias training for our leaders and various listening and learning programs for all employees directed at raising diversity awareness and encouraging honest and open discussions.

In 2021, we also formalized into policy our long-standing practice of requiring that diverse candidate slates be considered for all director positions and above.

Our long-held practice of hiring “the best” has fostered a diverse and inclusive workforce that represents the communities in which we operate.


Our monthly newsletter is fundamental to our communication and engagement efforts.

In the first quarter of 2021, we conducted our first formal full employee engagement survey, which we followed with a “pulse check” update in the fourth quarter.

We were pleased to see employee engagement increase 3% over this period, from 76% in the first quarter to 79% in the fourth quarter of 2021.

We believe these results were driven by the enhanced commitment to providing career development opportunities that we introduced during the year, which we discuss further below under “Training, Development, Growth and Recognition.” We intend to complete a full engagement survey followed by an interim pulse check update to monitor our performance each year.

We believe that the success of our engagement strategies can also be seen through third party surveys and recognition, such as our placement on the Forbes 2022 list of best employers.

Public Storage maintains compensation and benefits programs designed to incentivize, reward, and support our employees.

We are committed to the total well-being of all our employees and provide resources to help support them in times of need along with access to targeted solutions to help them achieve their personal and financial goals.

We provide affordable health plans and programs to virtually all our employees (99.5%).

Finally, we offer a range of educational tools and resources, including a dedicated health and wellness website, to help empower our employees to maintain a healthy and balanced lifestyle.

We provide training and development programs across all levels of Public Storage.

This includes hands-on training with a key training professional (“KTP”) in coordination with close coaching and development from a district manager, which has our newly onboarded teammates ready to manage a property in their first two weeks.

In addition, all new hires in leadership roles complete property-level training that gives them a hands-on view of our day-to-day operations at our properties.

This training helps facilitate engagement across all levels of the Company and is designed to provide our leaders with an understanding of the fundamentals of our business and operations, including the challenges our front-line employees face and our customers’ needs and expectations.

Most new hires join us as property managers without any experience in the self-storage industry.

In 2021, we enhanced our commitment to providing career development opportunities across Public Storage.

We have multiple career path opportunities for our property teams, and many choose to grow their entire career with us while learning new skills and taking on additional responsibility.

Some choose to focus on developing people as a KTP, others desire to learn multi-unit property management and local compliance requirements as a delinquent tenant specialist, and many want to build their career around ensuring our customers receive the best possible service as part of our customer care center.

For those who enjoy the challenges that come with managing multi-unit portfolios and people, we offer our District Manager in Training program, which prepares some of our best teammates to become successful district managers with Public Storage through a three-month development program that includes online courses and partnership with a peer trainer and mentor.

These include general risks associated with the ownership and operation of real estate, including changes in demand, risk related to development, expansion and acquisition of self-storage facilities, potential liability for environmental contamination, natural disasters and adverse changes in laws and regulations governing property tax, real estate and zoning; risks associated with economic downturns in the national and local markets in which we operate; risks associated with the COVID-19 pandemic (the “COVID Pandemic”) or similar events, including negative economic impacts which could reduce the demand for our facilities or increase tenant delinquencies and regulatory actions to close or limit access to our facilities, limit our ability to set rents or limit our ability to collect rent or evict delinquent tenants; the risk that there could be an out-migration of population from our markets which would reduce demand for our facilities; risks related to increased reliance on Google as a customer acquisition channel; risks associated with international operations including, but not limited to, unfavorable foreign currency rate fluctuations and changes in tax laws; the impact of the legal and regulatory environment, as well as national, state and local laws and regulations including, without limitation, those governing environmental issues, taxes, our tenant reinsurance business, and labor; risks due to ballot initiatives or other actions that could remove the protections of Proposition 13 with respect to our real estate and result in substantial increases in our assessed values and property tax bills in California; changes in United States federal or state tax laws related to the taxation of real estate investment trusts (“REITs”) and other corporations; security breaches or a failure of our networks, systems or technology could adversely impact our operations or our business, customer and employee relationships or result in fraudulent payments; risks associated with the self-insurance of certain business risks; and delays and cost overruns on our projects to develop new facilities or expand our existing facilities.

We own all of the economic interest in these facilities, except for 21 of these facilities held with other noncontrolling interests.

We reinsure policies held by tenants against losses to goods stored at the self-storage facilities we own, as well as those we manage for third parties.

We generally own facilities in major markets.

We believe that we have market share and concentration in major metropolitan centers, with approximately 70% of our 2020 same-store revenues generated in the 20 Metropolitan Statistical Areas (each, an “MSA”, as defined by the U.S. Census Bureau) with the highest population levels.

We believe this is a competitive advantage relative to other self-storage operators, which do not have our geographic concentration and market share in the major MSAs.

Recently, larger national operators (including ourselves) are offering to manage facilities owned by third parties on their platform for a fee, and Google is offering a more convenient platform for small operators to compete with larger operators in paid search bidding campaigns to drive web traffic and increase reservations.

Depending upon how many smaller operators avail themselves of these management services and Google’s platform, these two developments may potentially diminish the competitive advantage we have versus smaller owner/operators.

Newly developed facilities compete with many of the facilities we own, negatively impacting our occupancies, rental rates, and rental growth, particularly as newly developed facilities fill up.

The level of new construction varies in each market over time, depending upon many factors such as the cost and availability of land, construction costs, zoning limitations, and the availability of capital, as well as local demand and economic conditions.

Currently, we are affected by newly developed facilities in markets such as Atlanta, Austin, Charlotte, Chicago, Dallas, Denver, Houston, Miami, Minneapolis, New York and Portland.

We expect development of new self-storage facilities to continue to impact our results for the foreseeable future.

Our Call Center: Our call center is staffed by skilled sales specialists.

In addition, in 2020 we have implemented technology solutions in the area of labor scheduling, an integrated customer smartphone application, automated and centralized property access systems, and website customer chat functions.

From time to time we explore expansion of our activities to other countries.

Any such strategic expansion would most likely involve acquiring an interest in an existing operator’s platform.

There can be no assurance that any such expansion will occur in the future or the timing thereof.

Participate in the growth of PS Business Parks, Inc.: We hold a 42% equity interest in PSB.

Our investment in PSB provides diversification into another asset type.

PSB seeks to grow its asset base in its existing markets as well as increase the cash flows from its owned portfolio.

As of December 31, 2020, PSB owned and operated approximately 27.7 million rentable square feet of commercial space.

Participate in the growth of Shurgard: We hold a 35% interest in Shurgard.

We believe Shurgard is the largest self-storage company in Western Europe.

Customer awareness and availability of self-storage is significantly lower in Europe than in the U.S. However, with more awareness and product supply, we believe there is potential for increased demand for storage space in Europe.

We believe Shurgard can capitalize on potential increased demand through the development of new facilities and acquiring existing facilities.

From January 1, 2018 through December 31, 2020, Shurgard acquired 17 facilities from third parties for approximately $187.7 million, and has opened six development properties at a total cost of approximately $66.9 million.

At December 31, 2020, Shurgard had ten properties in their development pipeline.

See “We have significant exposure to real estate risk.” and “We are subject to new and changing legislation and regulations, including the California’s Consumer Privacy Act” in Item 1A.

“Risk Factors” for further information regarding our risks related to government regulations.

In addition, during public health crises, such as the COVID Pandemic, or in response to natural disasters, such as wildfires in California in recent years, our properties and our tenants have been subject to emergency government regulations that have impacted our operations and our business.

See “We are subject to risks from the COVID Pandemic and we may in the future be subject to risks from other public health crises” and “We have been and may in the future be adversely impacted by emergency regulations adopted in response to significant events, such as natural disasters or public health crises, that could adversely impact our operations.” in Item 1A.

“Risk Factors”.

environmentally-friendly capital initiatives and building and operating properties with a high structural resilience and low obsolescence.

Impact of the COVID-19 Pandemic

During a significant portion of the year ended December 31, 2020, the COVID Pandemic has resulted in restrictions on business activities in most sectors of the economy in virtually all markets we operate in, due to governmental “stay at home” orders, risk mitigation procedures, closure of businesses not considered to be “essential,” as well as other direct and indirect impacts, including a significant increase in unemployment in the U.S.

The impact of the COVID Pandemic on our business is described more fully in “Overview” and the various sections of our Management’s Discussion and Analysis of Financial Condition and Results of Operations which follows.

We seek to earn the commitment of employees by making a strong commitment to them.

Doing the right thing and integrity are core values we live by at Public Storage and the cornerstone to our culture.

Acting with the highest integrity is imperative to our success, our customer’s satisfaction and our employee’s engagement.

Our employee population is approximately 70% female and approximately 51% have self-identified as people of color; Black or African American (23%), Hispanic or Latino (18%), Asian (4%), of two or more races (4%), Native American (1%), and Pacific Islander (1%).

For a description of the Company’s legal proceedings, see “Note [removed: 13.][added: 14.]

[removed: \[X\]] [added: ☒] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year [removed: ended December 31, 2020.][added: ended December 31, 2021.]

[removed: \[ \]] [added: ☐] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

| Maryland | [added: | | | | |] 95-3551121 | [added: | |]

| (*State or other jurisdiction of incorporation or organization*) | [added: | | | | |] (*I.R.S. Employer Identification Number*) | [added: | |]

[removed: | ‎701] [added: 701] Western [removed: Avenue, Glendale,] [added: Avenue, Glendale,] California 91201-2349 [removed: (*Address of principal executive offices*) (*Zip Code*) | |]

| Title of Class | | [added: |] Trading Symbol | | [added: |] Name of exchange on which registered | [added: | |]

| Common Shares, $0.10 par value | | [added: |] PSA | | [added: |] New York Stock Exchange | [added: | |]

| Depositary Shares Each Representing 1/1,000 of a [removed: 5.125%] [added: 5.150%] Cum Pref Share, Series [removed: C,] [added: F,] $0.01 par value | | [removed: PSAPrC] | [added: PSAPrF] | [added: | |] New York Stock Exchange | [added: | |]

| Depositary Shares Each Representing 1/1,000 of a [removed: 4.950%] [added: 5.050%] Cum Pref Share, Series [removed: D,] [added: G,] $0.01 par value | | [removed: PSAPrD] | [added: PSAPrG] | [added: | |] New York Stock Exchange | [added: | |]

| Depositary Shares Each Representing 1/1,000 of a [removed: 4.900%] [added: 5.600%] Cum Pref Share, Series [removed: E,] [added: H,] $0.01 par value | | [removed: PSAPrE] | [added: PSAPrH] | [added: | |] New York Stock Exchange | [added: | |]

| Depositary Shares Each Representing 1/1,000 of a [removed: 5.150%] [added: 4.875%] Cum Pref Share, Series [removed: F,] [added: I,] $0.01 par value | | [removed: PSAPrF] | [added: PSAPrI] | [added: | |] New York Stock Exchange | [added: | |]

| Depositary Shares Each Representing 1/1,000 of a [removed: 5.050%] [added: 4.700%] Cum Pref Share, Series [removed: G,] [added: J,] $0.01 par value | | [removed: PSAPrG] | [added: PSAPrJ] | [added: | |] New York Stock Exchange | [added: | |]

| Depositary Shares Each Representing 1/1,000 of a [removed: 5.600%] [added: 4.750%] Cum Pref Share, Series [removed: H,] [added: K,] $0.01 par value | | [removed: PSAPrH] | [added: PSAPrK] | [added: | |] New York Stock Exchange | [added: | |]

| Depositary Shares Each Representing 1/1,000 of a [removed: 4.875%] [added: 4.625%] Cum Pref Share, Series [removed: I,] [added: L,] $0.01 par value | | [removed: PSAPrI] | [added: PSAPrL] | [added: | |] New York Stock Exchange | [added: | |]

| Depositary Shares Each Representing 1/1,000 of a [removed: 4.700%] [added: 4.125%] Cum Pref Share, Series [removed: J,] [added: M,] $0.01 par value | | [removed: PSAPrJ] | [added: PSAPrM] | [added: | |] New York Stock Exchange | [added: | |]

| Depositary Shares Each Representing 1/1,000 of a [removed: 4.750%] [added: 3.875%] Cum Pref Share, Series [removed: K,] [added: N,] $0.01 par value | | [removed: PSAPrK] | [added: PSAPrN] | [added: | |] New York Stock Exchange | [added: | |]

| Depositary Shares Each Representing 1/1,000 of a [removed: 4.625%] [added: 3.900%] Cum Pref Share, Series [removed: L,] [added: O,] $0.01 par value | | [removed: PSAPrL] | [added: PSAPrO] | [added: | |] New York Stock Exchange | [added: | |]

| Depositary Shares Each Representing 1/1,000 of a [removed: 4.125%] [added: 4.000%] Cum Pref Share, Series [removed: M,] [added: P,] $0.01 par value | | [removed: PSAPrM] | [added: PSAPrP] | [added: | |] New York Stock Exchange | [added: | |]

| Depositary Shares Each Representing 1/1,000 of a [removed: 3.875%] [added: 3.950%] Cum Pref Share, Series [removed: N,] [added: Q,] $0.01 par value | | [removed: PSAPrN] | [added: PSAPrQ] | [added: | |] New York Stock Exchange | [added: | |]

| Depositary Shares Each Representing 1/1,000 of a [removed: 3.900%] [added: 4.000%] Cum Pref Share, Series [removed: O,] [added: R,] $0.01 par value | | [removed: PSAPrO] | [added: PSAPrR] | [added: | |] New York Stock Exchange | [added: | |]

| 0.875% Senior Notes due 2032 | | [added: |] PSA32 | | [added: |] New York Stock Exchange | [added: | |]

Securities registered pursuant to Section 12(g) of the [removed: Act:] [added: Act:] None

[added: |] Yes [removed: \[X\]No \[ \]][added: | | | ☒ | | | No | | | ☐ | | |]

[added: |] Yes [removed: \[ \]No \[X\]][added: | | | ☐ | | | No | | | ☒ | | |]

[added: |] Yes [removed: \[X\]No \[ \]][added: | | | ☒ | | | No | | | ☐ | | |]

[added: |] Yes [removed: \[X\]No \[ \]][added: | | | ☒ | | | No | | | ☐ | | |]

| Large accelerated filer | [added: | |] Accelerated filer | [added: | |] Non-accelerated filer | [added: | |] Smaller reporting company | [added: | |] Emerging growth company | [added: | |]

[added: |] Yes [removed: \[ \]No \[X\]][added: | | | ☐ | | | No | | | ☒ | | |]

The aggregate market value of the voting and non-voting common shares held by non-affiliates of the Registrant as of June 30, [removed: 2020:][added: 2021:]

Common Shares, $0.10 [removed: Par Value Per Share] [added: par value per share] – [removed: $29,116,505,000] [added: $45,156,391,000] (computed on the basis of [removed: $191.89] [added: $300.69] per share, which was the reported closing sale price of the Company's Common Shares on the New York Stock Exchange (the “NYSE”) on June 30, [removed: 2020).][added: 2021).]

As of February [removed: 19, 2021,] [added: 18, 2022,] there were [removed: 174,912,175] [added: 175,462,248] outstanding Common Shares, [removed: $.10] [added: $0.10] par value per share.

[removed: ‎DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY REFERENCE

Portions of the definitive proxy statement to be filed in connection with the Annual Meeting of Shareholders to be held in [removed: 2021] [added: 2022] are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent described therein.

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*(Address of principal executive offices) (Zip Code)*

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| Depositary Shares Each Representing 1/1,000 of a 4.100% Cum Pref Share, Series S, $0.01 par value | | | PSAPrS | | | New York Stock Exchange | | |

| 0.500% Senior Notes due 2030 | | | PSA30 | | | New York Stock Exchange | | |

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| ☒ | | | ☐ | | | ☐ | | | ☐ | | | ☐ | | |

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| \[X\] | \[ \] | \[ \] | \[ \] | \[ \] |

\[ \]

\[X\]

‎

At December 31, [removed: 2020,] [added: 2021,] we had controlling ownership interests in [removed: 2,548] [added: 2,787] self-storage facilities located in [removed: 38] [added: 39] states within the U.S.:

| | [added: | |] Number of Storage Facilities | | [added: | | | |] Net Rentable Square Feet (in thousands) | [added: | |]

| California | | | | [added: | | | | | | | |]

| North Carolina | [removed: 93] | | [removed: 6,833] [added: 103] | [added: | | | | | 7,623 | | |]

| New York | [added: | |] 69 | | [added: | | | |] 4,817 | [added: | |]

| New Jersey | [added: | |] 58 | | [removed: 3,863] | [added: | | | 3,874 | | |]

| South Carolina | [removed: 63] | | [removed: 3,668] [added: 69] | [added: | | | | | 4,095 | | |]

| Massachusetts | [added: | |] 28 | | [added: | | | |] 1,976 | [added: | |]

(a)See Schedule III: Real Estate and Accumulated Depreciation in [removed: the Company’s 2020 financials,] [added: our consolidated financial statements included in this Annual Report on Form 10-K,] for a summary of land, building, accumulated depreciation, square footage, and number of properties by market.

At December 31, [removed: 2020, 27] [added: 2021, 11] of our facilities with a net book value of [removed: $102] [added: $66] million were encumbered by an aggregate of [removed: $25] [added: $23] million in mortgage notes payable.

[removed: The most prevalent recently constructed facilities have higher density footprints with large, multi-story buildings with climate control and 1,000 or more self-storage spaces, a more imposing and visible retail presence, and a] prominent and large rental office designed to appeal to customers as an attractive and retail-focused “store.” Our self-storage portfolio includes facilities with characteristics of the oldest facilities, characteristics of the most recently constructed facilities, and those with characteristics of both older and recently [added: constructed facilities.]

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | At December 31, 2021 | | | | | | | | |

| Southern | | | 258 | | | | | | 19,221 | | |

| Northern | | | 182 | | | | | | 11,581 | | |

| Texas | | | 406 | | | | | | 34,520 | | |

| Florida | | | 307 | | | | | | 21,831 | | |

| Illinois | | | 132 | | | | | | 8,536 | | |

| Georgia | | | 121 | | | | | | 8,194 | | |

| Virginia | | | 118 | | | | | | 7,781 | | |

| Maryland | | | 102 | | | | | | 7,381 | | |

| Washington | | | 104 | | | | | | 7,300 | | |

| Colorado | | | 85 | | | | | | 6,320 | | |

| Minnesota | | | 64 | | | | | | 4,935 | | |

| Ohio | | | 58 | | | | | | 3,833 | | |

| Arizona | | | 54 | | | | | | 3,693 | | |

| Michigan | | | 51 | | | | | | 3,589 | | |

| Indiana | | | 44 | | | | | | 2,864 | | |

| Missouri | | | 43 | | | | | | 2,845 | | |

| Tennessee | | | 41 | | | | | | 2,571 | | |

| Pennsylvania | | | 34 | | | | | | 2,452 | | |

| Oregon | | | 43 | | | | | | 2,451 | | |

| Oklahoma | | | 26 | | | | | | 2,086 | | |

| Nevada | | | 30 | | | | | | 2,064 | | |

| Kansas | | | 23 | | | | | | 1,383 | | |

| Other states (13 states) | | | 134 | | | | | | 8,503 | | |

| Total (a) | | | 2,787 | | | | | | 198,319 | | |

The most prevalent recently constructed facilities have higher density footprints with large, multi-story buildings with climate control and 1,000 or more self-storage spaces, a more imposing and visible retail presence, and a

| | | | |

| --- | --- | --- | --- |

| | At December 31, 2020 | | |

| | | | |

| Southern | 253 | | 18,661 |

| Northern | 179 | | 11,271 |

| Texas | 315 | | 24,115 |

| Florida | 301 | | 21,006 |

| Illinois | 130 | | 8,361 |

| Georgia | 116 | | 7,820 |

| Washington | 101 | | 7,042 |

| Virginia | 104 | | 6,455 |

| Colorado | 78 | | 5,739 |

| Minnesota | 61 | | 4,721 |

| Maryland | 63 | | 3,878 |

| Ohio | 55 | | 3,692 |

| Michigan | 50 | | 3,496 |

| Arizona | 49 | | 3,311 |

| Missouri | 41 | | 2,752 |

| Indiana | 40 | | 2,570 |

| Pennsylvania | 33 | | 2,415 |

| Tennessee | 37 | | 2,363 |

| Oregon | 40 | | 2,127 |

| Nevada | 28 | | 1,915 |

| Oklahoma | 23 | | 1,644 |

| Kansas | 21 | | 1,268 |

| Other states (12 states) | 119 | | 7,272 |

| | | | |

| Total (a) | 2,548 | | 175,051 |

| | | | |

constructed facilities.

‎

As of February [removed: 19, 2021,] [added: 18, 2022,] there were approximately [removed: 11,158] [added: 10,524] holders of record of our Common Shares.

From the inception of the repurchase program through February [removed: 24, 2021,] [added: 22, 2022,] we have repurchased a total of 23,721,916 common shares (all purchased prior to 2010) at an aggregate cost of approximately $679.1 million.

Our common share repurchase program does not have an expiration date and there are 11,278,084 common shares that may yet be repurchased under our repurchase program as of December 31, [removed: 2020.][added: 2021.]

The financial statements and supplementary data appearing on pages F-3 to F-30 are incorporated herein by reference.

Not applicable.

As of December 31, [removed: 2020,] [added: 2021,] we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act).

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, [removed: 2020,] [added: 2021,] at a reasonable assurance level.

[removed: Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an] evaluation of the effectiveness of our internal control over financial reporting based on the framework in *Internal Control-Integrated Framework* issued by the Committee on Sponsoring Organizations of the Treadway Commission (2013 Framework).

Based on our evaluation under the framework in *Internal Control-Integrated Framework*, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2020.][added: 2021.]

The effectiveness of internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] has been audited by Ernst & Young LLP, an independent registered public accounting firm.

There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of [removed: 2020] [added: 2021] to which this report relates that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

[removed: | Report] [added: Report] of Independent Registered Public Accounting [removed: Firm |][added: Firm]

[removed: |] To the Shareholders and Board of Trustees of Public Storage [removed: |]

[removed: |] Opinion on Internal Control over Financial Reporting [removed: |]

[removed: |] We have audited Public Storage’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). [removed: In our opinion, Public Storage (the Company) maintained, in all material aspects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria. |]

[removed: |] We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of income, comprehensive income, equity and [added: redeemable noncontrolling interests and] cash flows for each of the three years in the period ended December 31, [removed: 2020] [added: 2021] and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February [removed: 24, 2021] [added: 22, 2022] expressed an unqualified opinion thereon. [removed: |]

[removed: |] Basis for Opinion [removed: |]

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an

In our opinion, Public Storage (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

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 audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

February 22, 2022

‎

| |

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| --- |

| The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. |

February 24, 2021

‎

‎

PART III

Not applicable.

PART III

Russell, Jr., age [removed: 61,] [added: 62,] has served as Chief Executive Officer since January 1, 2019, and as President since July 2016.

Thomas Boyle, age [removed: 38,] [added: 39,] has served as Chief Financial Officer since January 1, 2019, and was previously Vice President and Chief Financial Officer, Operations since joining the Company in November 2016.

Vitan, age [removed: 47,] [added: 48,] has served as Senior Vice President, Chief Legal Officer and Corporate Secretary since April 20, 2019, and was Vice President and Chief Counsel–Litigation and Operations since joining the Company in June 2016.

Natalia Johnson, age [removed: 43,] [added: 44,] has served as the Chief Administrative Officer since August 4, 2020.

Other information required by this item is hereby incorporated by reference to the material appearing in the Notice and Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A under the Exchange Act.

The information required by this item is hereby incorporated by reference to the material appearing in the Notice and Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A under the Exchange Act.

‎

[removed: Other information] [added: Information] required by this item is hereby incorporated by reference to the material appearing in the Notice and Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A under the Exchange Act.

The following table sets forth information as of December 31, 2020 on the Company’s equity compensation plans:

| | | | |

| --- | --- | --- | --- |

| | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans |

| Equity compensation plans approved by security holders (a) | 3,513,955 (b) | $210.59 (d) | 343,648 |

| | | | |

| Equity compensation plans not approved by security holders (c) | \- | \- | \- |

a)The Company’s stock option and stock incentive plans are described more fully in Note 10 to the December 31, 2020 financial statements.

All plans were approved by the Company’s shareholders.

b)Includes 552,788 restricted share units that, if and when vested, will be settled in common shares of the Company on a one for one basis.

c)There are no securities available for future issuance or currently outstanding under plans not approved by the Company’s shareholders as of December 31, 2020.

d)Represents the average exercise price of 2,961,167 stock options outstanding at December 31, 2020.

We also have 552,788 restricted share units outstanding at December 31, 2020 that vest for no consideration.

The information required by this item is hereby incorporated by reference to the material appearing in the Notice and Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A under the Exchange Act.

The information required by this item is hereby incorporated by reference to the material appearing in the Notice and Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A under the Exchange Act of 1934.

[removed: | a. | 1. |] Financial Statements [removed: | | | |]

[removed: | | | | |] The financial statements listed in the accompanying Index to [added: Consolidated] Financial Statements and Schedules hereof are filed as part of this report. [removed: | |]

[removed: | | 2. | Financial] [added: 2.Financial] Statement Schedules [removed: | | | |]

[removed: | | | | |] The financial statements schedules listed in the accompanying Index to [added: Consolidated] Financial Statements and Schedules are filed as part of this report. [removed: | |]

[removed: | | 3. | Exhibits | | | |][added: INDEX TO EXHIBITS (1)]

[removed: | | | | | |] See Index to Exhibits contained herein. [removed: |]

[removed: | | |] See Index to Exhibits contained herein. [removed: | | | |]

[removed: | c. | Financial] [added: c.Financial] Statement Schedules [removed: | | | | |]

[removed: | | |] Not applicable. [removed: | | | |]

| | [added: | | | | |] PUBLIC STORAGE | [added: | |]

[removed: | |] (Items 15(a)(3) and 15(c)) [removed: |]

| 3.1 | [removed: [Articles of Amendment and Restatement of Declaration] [added: | | [Restated](https://www.sec.gov/Archives/edgar/data/1393311/000156276221000166/psa-20210331xex3_1.htm) [Declaration] of Trust of Public Storage, a Maryland real estate investment [removed: trust, filed with the Maryland State Department of Assessments and Taxation on May 4, 2018.] [added: trust.] Filed with the Registrant’s [removed: Current] [added: Quarterly] Report on Form [removed: 8-K dated May 8, 2018] [added: 10-Q for the quarterly period ended March 31, 2021] and incorporated by reference [removed: herein.](http://www.sec.gov/Archives/edgar/data/1393311/000139331118000012/psa-20180508xex3_1.htm)] [added: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000156276221000166/psa-20210331xex3_1.htm)] | [added: | |]

| 3.2 | [added: | |] [Amended and Restated Bylaws of Public [removed: Storage, a Maryland real estate investment trust, dated May 4, 2018.] [added: Storage.] Filed with the Registrant’s [removed: Current] [added: Quarterly] Report on Form [removed: 8-K dated May 8, 2018] [added: 10-Q for the quarterly period ended March 31, 2021] and incorporated by reference [removed: herein.](http://www.sec.gov/Archives/edgar/data/1393311/000139331118000012/psa-20180508xex3_2.htm)] [added: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000156276221000166/psa-20210331xex3_2.htm)] | [added: | |]

| 3.3 | [added: | |] [Articles Supplementary for Public Storage [removed: 5.400%] [added: 5.150%] Cumulative Preferred Shares, Series [removed: B.] [added: F.] Filed with the Registrant’s Current Report on Form 8-K dated [removed: January 12, 2016] [added: May 23, 2017] and incorporated by reference [removed: herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312516428828/d224807dex31.htm)] [added: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312517181653/d403845dex31.htm)] | [added: | |]

| 3.4 | [added: | |] [Articles Supplementary for Public Storage [removed: 5.125%] [added: 5.050%] Cumulative Preferred Shares, Series [removed: C.] [added: G.] Filed with the Registrant’s Current Report on Form 8-K dated [removed: May 10, 2016] [added: July 31, 2017] and incorporated by reference [removed: herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312516587149/d153660dex31.htm)] [added: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312517244616/d431375dex31.htm)] | [added: | |]

| 3.5 | [added: | |] [Articles Supplementary for Public Storage [removed: 4.950%] [added: 5.600%] Cumulative Preferred Shares, Series [removed: D.] [added: H.] Filed with the Registrant’s Current Report on Form 8-K dated [removed: July 13, 2016] [added: February 28, 2019] and incorporated by reference [removed: herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312516648284/d220245dex31.htm)] [added: herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519060872/d707503dex31.htm)] | [added: | |]

| 3.6 | [added: | |] [Articles Supplementary for Public Storage [removed: 4.900%] [added: 4.875%] Cumulative Preferred Shares, Series [removed: E.] [added: I.] Filed with the Registrant’s Current Report on Form 8-K dated [removed: October 6, 2016] [added: September 5, 2019] and incorporated by reference [removed: herein](http://www.sec.gov/Archives/edgar/data/1393311/000119312516733812/d146398dex31.htm).] [added: herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519240029/d95914dex31.htm)] | [added: | |]

| 3.7 | [added: | |] [Articles Supplementary for Public Storage [removed: 5.150%] [added: 4.700%] Cumulative Preferred Shares, Series [removed: F.] [added: J.] Filed with the Registrant’s Current Report on Form 8-K dated [removed: May 23, 2017] [added: November 5, 2019] and incorporated by reference [removed: herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312517181653/d403845dex31.htm)] [added: herein](http://www.sec.gov/Archives/edgar/data/1393311/000119312519286081/d820234dex31.htm).] | [added: | |]

| 3.8 | [added: | |] [Articles Supplementary for Public Storage [removed: 5.050%] [added: 4.750%] Cumulative Preferred Shares, Series [removed: G.] [added: K.] Filed with the Registrant’s Current Report on Form 8-K dated [removed: July 31, 2017] [added: December 11, 2019] and incorporated by reference [removed: herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312517244616/d431375dex31.htm)] [added: herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519312789/d847836dex31.htm)] | [added: | |]

| 3.9 | [added: | |] [Articles Supplementary for Public Storage [removed: 5.600%] [added: 4.625%] Cumulative Preferred Shares, Series [removed: H.] [added: L.] Filed with the Registrant’s Current Report on Form 8-K dated [removed: February 28, 2019] [added: June 8, 2020] and incorporated by reference [removed: herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519060872/d707503dex31.htm)] [added: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312520165668/d941759dex31.htm)] | [added: | |]

| [removed: 3.10] [added: 3.11] | [added: | |] [Articles Supplementary for Public Storage [removed: 4.875%] [added: 3.875%] Cumulative Preferred Shares, Series [removed: I.] [added: N.] Filed with the Registrant’s Current Report on Form 8-K dated September [removed: 5, 2019] [added: 29, 2020] and incorporated by reference [removed: herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519240029/d95914dex31.htm)] [added: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312520259620/d824439dex31.htm)] | [added: | |]

| [removed: 3.11] [added: 3.12] | [added: | |] [Articles Supplementary for Public Storage [removed: 4.700%] [added: 3.900%] Cumulative Preferred Shares, Series [removed: J.] [added: O.] Filed with the Registrant’s Current Report on Form 8-K dated November [removed: 5, 2019] [added: 9, 2020] and incorporated by reference [removed: herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519286081/d820234dex31.htm)] [added: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312520293004/d24818dex31.htm)] | [added: | |]

| [removed: 3.12] [added: 3.10] | [added: | |] [Articles Supplementary for Public Storage [removed: 4.750%] [added: 4.125 %] Cumulative Preferred Shares, Series [removed: K.] [added: M.] Filed with the Registrant’s Current Report on Form 8-K dated [removed: December] [added: August] 11, [removed: 2019] [added: 2020] and incorporated by reference [removed: herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519312789/d847836dex31.htm)] [added: herein](https://www.sec.gov/Archives/edgar/data/1393311/000119312520219127/d43890dex31.htm).] | [added: | |]

| 3.13 | [added: | |] [Articles Supplementary for Public Storage [removed: 4.625%] [added: 4.000%] Cumulative Preferred Shares, Series [removed: L.] [added: P.] Filed with the [removed: Registrant’s] [added: Company’s] Current Report on Form 8-K dated June [removed: 8, 2020] [added: 7, 2021] and incorporated by reference [removed: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312520165668/d941759dex31.htm)] [added: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312521186733/d180655dex31.htm)] | [added: | |]

| 3.14 | [added: | |] [Articles Supplementary for Public Storage [removed: 4.125 %] [added: 3.950%] Cumulative Preferred Shares, Series [removed: M.] [added: Q.] Filed [removed: with] [added: as Exhibit 3.1 to] the [removed: Registrant’s] [added: Company’s] Current Report on Form 8-K dated August [removed: 11, 2020] [added: 10, 2021] and incorporated by reference [removed: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312520219127/d43890dex31.htm)] [added: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312521243371/d187599dex31.htm)] | [added: | |]

| 3.15 | [added: | |] [Articles Supplementary for Public Storage [removed: 3.875%] [added: 4.000%] Cumulative Preferred Shares, Series [removed: N.] [added: R.] Filed [removed: with] [added: as Exhibit 3.1 to] the [removed: Registrant’s] [added: Company’s] Current Report on Form 8-K dated [removed: September 29, 2020] [added: November 9, 2021] and incorporated by reference [removed: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312520259620/d824439dex31.htm)] [added: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312521325998/d240102dex31.htm)] | [added: | |]

| 3.16 | [added: | |] [Articles Supplementary for Public Storage [removed: 3.900%] [added: 4.100%] Cumulative Preferred Shares, Series [removed: O.] [added: S.] Filed [removed: with] [added: as Exhibit 3.1 to] the [removed: Registrant’s] [added: Company’s] Current Report on Form 8-K dated [removed: November 9, 2020] [added: January 4, 2022] and incorporated by reference [removed: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312520293004/d24818dex31.htm)] [added: herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312522002641/d278496dex31.htm)] | [added: | |]

| 4.1 | [added: | |] [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.](http://www.sec.gov/Archives/edgar/data/1393311/000119312507130364/dex101.htm) | [added: | |]

| 4.2 | [added: | |] [Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934. Filed [removed: herewith.](https://www.sec.gov/Archives/edgar/data/1393311/000156276221000058/psa-20201231xex4_2.htm)] [added: herewith.](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm)] | [added: | |]

| 10.1 | [added: | |] [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.](http://www.sec.gov/Archives/edgar/data/866368/0000866368-98-000024.txt) | [added: | |]

| 10.2 | [added: | |] [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.](http://www.sec.gov/Archives/edgar/data/318380/000031838099000018/0000318380-99-000018.txt) | [added: | |]

| 10.3 | [added: | |] [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.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519112437/d738199dex101.htm) | [added: | |]

| 10.4* | [added: | |] [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.](http://www.sec.gov/Archives/edgar/data/1393311/000139331116000036/psa-20151231ex10116996e.htm) | [added: | |]

| 10.5* | [added: | |] [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 [removed: reference.](http://www.sec.gov/Archives/edgar/data/1393311/000139331116000036/psa-20151231ex101227ce4.htm)] [added: reference](http://www.sec.gov/Archives/edgar/data/1393311/000139331116000036/psa-20151231ex101227ce4.htm).] | [added: | |]

| 10.6* | [added: | |] [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.](http://www.sec.gov/Archives/edgar/data/1393311/000139331116000036/psa-20151231ex101308fcd.htm) | [added: | |]

| 10.7* | [added: | |] [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.](http://www.sec.gov/Archives/edgar/data/1393311/000139331116000036/psa-20151231ex10145e220.htm) | [added: | |]

| 10.8* | [added: | |] [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.](http://www.sec.gov/Archives/edgar/data/1393311/000139331117000008/psa-20161231xex10_16.htm) | [added: | |]

| 10.9* | [added: | |] [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.](http://www.sec.gov/Archives/edgar/data/1393311/000139331117000008/psa-20161231xex10_18.htm) | [added: | |]

| 10.10 | [added: | |] [Form of Trustee and Officer Indemnification [removed: Agreement. Filed] [added: Agreement.](http://www.sec.gov/Archives/edgar/data/1393311/000139331117000008/psa-20161231xex10_19.htm) [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.](http://www.sec.gov/Archives/edgar/data/1393311/000139331117000008/psa-20161231xex10_19.htm) | [added: | |]

| 10.11* | [added: | |] [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 [removed: reference.](http://www.sec.gov/Archives/edgar/data/1393311/000139331114000011/psa-20140501ex101aec3ff.htm)] [added: reference](http://www.sec.gov/Archives/edgar/data/1393311/000139331114000011/psa-20140501ex101aec3ff.htm).] | [added: | |]

a.

1.

3.Exhibits

b.Exhibits:

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| 4.8 | | | [Fifth Supplemental Indenture, dated as of April 23, 2021, between Public Storage and Wells Fargo Bank, National Association, as trustee, including the form of Global Note representing the Floating Rate Notes. Filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated April 23, 2021 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1393311/000119312521128967/d135565dex42.htm) | | |

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| 4.9 | | | [Sixth Supplemental Indenture, dated as of April 23, 2021, between Public Storage and Wells Fargo Bank, National Association, as trustee, including the form of Global Note representing the 2028 Notes. Filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K dated April 23, 2021 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1393311/000119312521128967/d135565dex43.htm) | | |

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| 4.10 | | | [Seventh Supplemental Indenture, dated as of April 23, 2021, between Public Storage and Wells Fargo Bank, National Association, as trustee, including the form of Global Note representing the 2031 Notes. Filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K dated April 23, 2021 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1393311/000119312521128967/d135565dex44.htm) | | |

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| 4.11 | | | [Eighth Supplemental Indenture, dated as of September 9, 2021, between Public Storage and Wells Fargo Bank, National Association, as trustee, including the form of Global Note representing the Notes. Filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated September 9, 2021 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1393311/000119312521268821/d228573dex42.htm) | | |

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| 4.12 | | | [Ninth Supplemental Indenture, dated as of November 9, 2021, between Public Storage and Computershare Trust Company, N.A. (as successor to Wells Fargo Bank, National Association), as trustee, including the form of Global Note representing the 2026 Notes. Filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated November 9, 2021 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1393311/000119312521324419/d257375dex42.htm) | | |

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| 4.13 | | | [Tenth Supplemental Indenture, dated as of November 9, 2021, between Public Storage and Computershare Trust Company, N.A. (as successor to Wells Fargo Bank, National Association), as trustee, including the form of Global Note representing the 2028 Notes. Filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K dated November 9, 2021 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1393311/000119312521324419/d257375dex43.htm) | | |

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| 4.14 | | | [Eleventh Supplemental Indenture, dated as of November 9, 2021, between Public Storage and Computershare Trust Company, N.A. (as successor to Wells Fargo Bank, National Association), as trustee, including the form of Global Note representing the 2031 Notes. Filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K dated November 9, 2021 and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1393311/000119312521324419/d257375dex44.htm)[.](https://www.sec.gov/Archives/edgar/data/1393311/000119312521324419/d257375dex44.htm) | | |

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| 10.13* | | | [Public Storage 2021 Equity and Performance-Based Incentive Compensation Plan. Filed as Appendix A to the Company’s 2021 Proxy Statement dated March 16, 2021 and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/1393311/000119312521082780/d848425ddef14a.htm) | | |

| b. | Exhibits: | | | | |

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| | INDEX TO EXHIBITS (1) |

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