Public Storage (PSA) 10-K risk factor changes: FY2022 vs FY2021

Risks Related to Our [added: Properties and Our] Business

See Note 14 to our December 31, [removed: 2021] [added: 2022] consolidated financial statements for a description of the risks of losses that are not covered by third-party insurance contracts.

[removed: *Consequences of climate change, including severe weather events, and the steps taken to prevent climate change, could result] [added: Our self-storage facilities are located] in [removed: increased capital expenditures, increased expenses, and reduced revenues:* Direct and indirect] [added: areas that may be subject to the direct] impacts of climate change, such as increased destructive weather [removed: events,] [added: events like] floods, fires, and [removed: drought] [added: drought, which] could result in significant damage to our [removed: self-storage] facilities, [removed: increase our costs,] [added: increased capital expenditures, increased expenses, reduced revenues,] or [removed: reduce] [added: reduced] demand for our [removed: self-storage] facilities.

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 [added: $370 million in improvements through December 31, 2022.]

Governmental, political, and societal [removed: pressure,] [added: pressures,] 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.

[removed: *Operating] [added: Operating] costs, including property taxes, could [removed: increase*.][added: increase.]

We could be subject to increases in [removed: insurance premiums,] property or other taxes, repair and maintenance costs, payroll, utility costs, [added: insurance premiums,] workers compensation, and other operating expenses due to various factors such as inflation, labor shortages, commodity and energy price increases, weather, increases to minimum wage rates, [removed: changes to governmental safety] [added: supply chain disruptions,] and [removed: real estate use limitations, as well as other governmental actions.]

Our property tax expense, which totaled approximately [removed: $335.1] [added: $386.7] million during the year ended December 31, [removed: 2021,] [added: 2022,] generally depends upon the assessed value of our real estate facilities as determined by assessors and government [removed: agencies, and accordingly] [added: agencies and, accordingly,] could be subject to substantial increases if such agencies [removed: changed] [added: change] 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.

[removed: *The] [added: The] acquisition of existing properties or self-storage operating companies is subject to risks that may adversely affect our growth and financial [removed: results.* We have acquired self-storage facilities from third parties in the past, and we expect to continue to do so in the future.][added: results.]

We face significant competition for suitable acquisition properties [added: and companies] from other real estate [removed: investors.][added: investors, including operating companies and private equity funds.]

As a result, we may be unable to acquire [added: the companies or] additional properties we desire or the purchase price for desirable [added: companies or] properties may be significantly increased.

Failures or unexpected circumstances in integrating facilities [removed: that we acquire directly] or [removed: via the acquisition of operating] companies [removed: into our operations,] [added: that we acquire,] or circumstances we did not detect or anticipate during due diligence, such as environmental matters, needed repairs or deferred maintenance, customer collection issues, assumed liabilities, turnover of critical personnel involved in acquired operating companies, or the effects of increased property tax following reassessment of a newly-acquired property, as well as the general risks of real estate investment and mergers and acquisitions, could jeopardize realization of the anticipated earnings from an acquisition.

[removed: *Development of self-storage facilities can subject us to risks.*] At December 31, [removed: 2021,] [added: 2022,] we had a pipeline of development projects totaling [removed: $800.0] [added: $979.6] million (subject to contingencies), and we expect to continue to seek additional development projects.

[removed: *There] [added: There] is significant competition among self-storage operators and from other storage [removed: alternatives*.][added: alternatives.]

Competition in the local market areas in which many of our properties are located is significant and [removed: has affected] [added: affects] our occupancy levels, rental rates, and operating expenses.

Development of self-storage facilities [removed: has increased in recent years,] [added: may increase,] which [removed: has intensified] [added: may intensify] competition [removed: and will continue to do so] as newly developed facilities are opened.

Development of self-storage facilities by other operators could [removed: continue to] increase, due to increases in availability of funds for investment or other reasons, and further intensify competition.

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

Customer preferences and/or needs for self-storage could change, decline, or shift to other product [removed: types] [added: types,] thereby impacting our business model and ability to grow and/or generate revenues.

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

[removed: *Our] [added: Our] newly developed and expanded facilities, and facilities that we manage for third party owners, may negatively impact the revenues of our existing [removed: facilities.* We continue to develop new self-storage facilities and expand our existing self-storage facilities.][added: facilities.]

In addition, we are seeking to increase the number of self-storage facilities that we manage for third party owners in exchange for a fee, many of which are in the process of stabilization and are [removed: in proximity to] [added: near] our existing stabilized self-storage facilities.

While we believe that this aggressive pricing allows us to increase our market share relative to our competitors and increase the cash flows of these properties, such pricing and the added capacity may also negatively impact our existing stabilized self-storage facilities that are [removed: in proximity to] [added: near] these unstabilized facilities.

[removed: *Many] [added: Many] of our existing self-storage facilities may be at a competitive disadvantage to newly developed [removed: facilities.* There is a significant level of development of new self-storage facilities, by us and other operators.][added: facilities.]

These newly developed facilities are generally of high quality, with a more fresh and vibrant appearance, more amenities [removed: such] [added: (such] as climate [removed: control,] [added: control),] more attractive office configurations, newer elements, and a more 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.

[removed: *We] [added: We] may incur significant liabilities from environmental contamination or moisture [removed: infiltration*.][added: infiltration.]

Economic conditions can adversely affect our business, financial condition, [removed: growth] [added: growth,] and access to capital.

Economic downturns or adverse economic or industry [removed: conditions] [added: conditions, including those related to high levels of inflation,] could adversely impact our financial results, growth, and access to capital.

Our revenues and operating cash flow can be negatively impacted by reductions in employment and population levels, household and disposable income, and [removed: other general economic factors that lead to a reduction in demand for rental space in each of the markets in which we operate.]

Our ability to raise capital [added: on attractive terms] to fund our activities may be adversely affected by challenging market [removed: conditions.][added: conditions, including high interest rates resulting from government efforts to manage inflation.]

We own approximately 35% of the common shares of Shurgard, and this investment has a [removed: $313.5] [added: $275.8] million book value and a [removed: $2.0] [added: $1.4] billion market value (based upon the closing trading price of Shurgard’s common stock) at December 31, [added: 2022.]

We recognized [removed: $24.4] [added: $26.4] million in equity in earnings and received [removed: $41.5] [added: $37.8] million in dividends in [removed: 2021] [added: 2022] with respect to Shurgard.

However, through our investment in Shurgard, we are exposed to additional risks unique to the various European markets [removed: Shurgard operates] in which [added: Shurgard operates, which] may adversely impact our business and financial results, [added: and] many of which are referred to in Shurgard’s public filings.

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

These laws [added: and regulations] can be difficult to apply or [removed: interpret and] [added: interpret,] can vary in each country or locality, and are subject to unexpected changes in their form and application due to regional, national, or local political uncertainty and other factors.

Such changes, or Shurgard’s failure to comply with these laws, could subject it to penalties or other sanctions, adverse changes in business processes, [removed: as well as potentially] [added: and, potentially,] adverse income tax, property tax, or other tax burdens.

*•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 [removed: Shurgard’s] [added: Shurgard] shares.

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

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

[removed: We are subject to risks from the COVID Pandemic and we may in the future be] [added: Our business is] subject to risks from [removed: other] public health [removed: crises.][added: and other crises like the COVID-19 Pandemic, including, among others:]

Natural disasters, terrorist attacks, civil unrest, or other events that could damage or otherwise disrupt our ability to operate our facilities could adversely impact our business and financial results.

Natural disasters, such as earthquakes, fires, hurricanes, and floods, terrorist attacks, civil unrest, and other events that damage our facilities or our customers' property, or that make our facilities temporarily unavailable, have in the past and may in the future adversely impact our business and financial results.

In addition, customer perceptions about the risk of property loss from these events could negatively impact self-storage demand.

We are subject to risks from the consequences of climate change, including severe weather events, as well as the transition to a low-carbon economy and other steps taken to prevent or mitigate climate change.

Indirect impacts of climate change could also adversely impact our business, including through increased costs, such as insurance costs or regulatory compliance costs.

In addition, the ongoing transition to a low-carbon economy presents certain risks for us and our customers, including stranded assets, increased costs, lower profitability, lower property values, lower household wealth, and macroeconomic risks related to high energy costs and energy shortages, among other things.

In addition, we have made investments in LED lighting and the installation of solar panels of approximately $100 million since 2021 through December 31, 2022.

In addition, our reputation and investor relationships could be damaged as a result of our involvement with activities perceived to be causing or exacerbating climate change, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change.

changes to governmental safety and real estate use limitations and other governmental actions.

We have acquired self-storage facilities and self-storage operating companies in the past, and we expect to continue to do so in the future.

On February 5, 2023, we disclosed that we have made a proposal to acquire all of the outstanding shares and units of Life Storage for consideration consisting of our common shares.

Our public offer followed prior rebuffs by Life Storage of our attempts to negotiate privately, and on February 16, 2023, Life Storage announced it had rejected the offer.

While we currently intend to engage in discussions with Life Storage, there can be no assurance that Life Storage will engage with us regarding our proposal or that we and Life Storage will agree to an acquisition transaction.

Additionally, Life Storage can avail itself of various takeover defenses, including the ability unilaterally to classify its board of trustees under the Maryland Unsolicited Takeover Act (MUTA).

Even if we reach an agreement with Life Storage, there can be no assurance that the conditions to closing such transaction would be satisfied in a timely manner or at all.

Further, if a transaction is consummated, there can be no assurance that we will realize the benefits we hope to achieve through the transaction, and the complexities of combining the two companies may result in unknown liabilities and unforeseen increased expenses.

If a transaction is not consummated, we nevertheless may incur significant costs associated with our pursuit of the transaction.

Our development program subjects us to risks.

Demand for self-storage facilities may be affected by customer perceptions and factors outside of our control.

We continue to develop new self-storage facilities and expand our existing self-storage facilities.

There is a significant level of development of new self-storage facilities, by us and other operators.

other general economic factors that lead to a reduction in demand for self-storage space in each of the markets in which we operate.

Public health and other crises, such as the COVID-19 Pandemic, have adversely impacted, and may in the future adversely impact, our business.

- risk that there could be an out-migration of population from certain high-cost major markets;

be significant, and could damage our reputation and our brand.

In addition, our customers could lose confidence in our ability to protect their

We maintain a portfolio of trademarks and trade dress that we believe are fundamental to the success of the Public Storage® brand.

We also own and seek to protect other intellectual property, such as propriety systems, processes, data, and other trade secrets that we have collected and developed in the course of operating our business and that we believe provides us with various competitive advantages.

In addition, our preferred shareholders have the right to elect two additional

- Holders of our Preferred Shares have limited rights in the event the Company ceases to pay dividends to shareholders, and have no rights with respect to a Company decision to discontinue listing the Preferred Shares on a national securities exchange or file reports with the SEC, including following a change of control transaction.

In addition, for tax years beginning after December 31, 2022, we would possibly also be subject to certain taxes enacted by the Inflation Reduction Act of 2022 that are applicable to non-REIT corporations, including the corporate alternative minimum tax and nondeductible one percent excise tax on certain stock repurchases.

Dividends payable by REITs do not qualify for the preferential tax rates available for some dividends.

Dividends payable by REITs may be taxed at higher rates than dividends of non-REIT corporations.

The maximum U.S. federal income tax rate for qualified dividends paid by domestic non-REIT corporations to U.S. stockholders that are individuals, trusts, or estates is generally 20%.

Dividends paid by REITs to such stockholders are generally not eligible for that rate, but under current tax law, such stockholders may deduct up to 20% of ordinary dividends (i.e., dividends not designated as capital gain dividends or qualified dividend income) received from a REIT for taxable years beginning before January 1, 2026.

Although this deduction reduces the effective tax rate applicable to certain dividends paid by REITs, such tax rate may still be higher than the tax rate applicable to regular corporate qualified dividends.

This may cause investors to view REIT investments as less attractive than investments in non-REIT corporations, which in turn may adversely affect the value of the stock of REITs, including our stock.

found in the CCPA.

We have significant exposure to real estate risk.

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 price, including:

*Natural disasters or terrorist attacks could cause damage to our facilities, resulting in increased costs and reduced revenues.* Natural disasters, such as earthquakes, fires, hurricanes and floods, or terrorist attacks could cause significant damage to our facilities and require significant repair costs, and make facilities temporarily uninhabitable, thereby reducing our revenues.

We may not have sufficient insurance coverage for losses caused by a terrorist attack, or such insurance may not be maintained, available or cost-effective.

In addition, significant natural disasters, terrorist attacks, threats of future terrorist attacks, or resulting wider armed conflicts could have negative impacts on self-storage demand and/or our revenues.

$230 million in improvements through December 31, 2021.

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

2021.

We have exposure to commercial property risk through our ownership in PSB.

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

We recognized $207.7 million in equity in earnings, and received $127.3 million in dividends in 2021 with respect to PSB.

PSB, as an owner, operator, and developer of real estate, is subject to many of the same risks we are with respect to real estate.

However, we may be exposed to other risks as a result of PSB’s ownership specifically of commercial facilities.

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

*Risk Factors*.”

Since being reported in December 2019, the COVID Pandemic has spread globally, including to every state in the United States, adversely affecting public health and economic activity.

Our business is subject to risks from the COVID Pandemic, including, among others:

- 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;

- 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 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 effectiveness of vaccine and treatment developments, including against variants such as 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 consumer behavior, all of which are uncertain and difficult to predict.

As a result, we are not able at this time to estimate the effect of these factors on our business, but the adverse impact on our business, results of operations, financial condition and cash flows could be material.

Future pandemics or public health crises could have similar impacts.

We believe that the

We are heavily dependent on computer systems, telecommunications and the Internet to process transactions, make payments, summarize results and manage our business.

Although we believe we have taken commercially reasonable

excise or penalty taxes), we would not be allowed a deduction for dividends paid, we would be subject to U.S. federal corporate income tax on our taxable income, and generally we would not be allowed to elect REIT status until the fifth year after such a disqualification.

Changes made by the Tax Cuts and Jobs Act, signed into law on December 22, 2017, limit our ability to deduct compensation in excess of $1 million paid to certain senior executives.

This could require us to increase distributions to our shareholders in the future in order to avoid paying tax and to maintain our REIT status.

topics.

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

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

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 [added: comparable land market data.]

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

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 [removed: estimate.][added: estimates.]

Our self-storage operations generate most of our net [removed: income] [added: income,] and our earnings growth is [removed: most] impacted by the [removed: level] [added: levels] of [removed: organic] growth within our Same Store Facilities (as defined [added: below) as well as within our Acquired Facilities and Newly Developed and Expanded Facilities (both as defined] below).

During [removed: the year ended December 31, 2021,] [added: 2022,] revenues generated by our Same Store Facilities increased by [removed: 10.5%,] [added: 14.8% ($409.9 million),] as compared to [removed: the previous year,] [added: 2021,] while Same Store cost of operations [removed: decreased] [added: increased] by [removed: 2%.][added: 5.7% ($39.9 million).]

In [removed: addition,] [added: our non-same store portfolio,] we [added: also have] developed and expanded self-storage [removed: space for a total cost] [added: facilities] of [removed: $218.0 million, adding 1.6] [added: 17.7] million net rentable square [removed: feet.][added: feet for a total cost of $1.6 billion.]

In order to enhance the competitive position of certain of our facilities relative to local competitors (including newly developed [removed: facilities) and execute on our climate initiatives and long-term sustainability strategies,] [added: facilities),] we have embarked on our multi-year Property of Tomorrow program to (i) rebrand our properties [removed: through] [added: with] more pronounced, attractive, and clearly identifiable color schemes and signage, (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.

We spent approximately [removed: $130] [added: $189] million on the program in [removed: 2021] [added: 2022] and expect to spend approximately [removed: $180] [added: $160] million in [removed: 2022.][added: 2023 on this effort.]

In 2021, net income allocable to our common shareholders was $1,732.4 million or $9.87 per diluted common share, compared to $1,098.3 million or $6.29 per diluted common share in [removed: 2020] [added: 2020,] representing an increase of $634.1 million or $3.58 per diluted common share.

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 [removed: PS Business Parks] [added: PSB] in 2021, partially offset by (iv) a $160.2 million increase in depreciation and amortization expense.

The $437.4 million increase in self-storage net operating income in 2021 as compared to 2020 is a result of a [removed: $276.9] [added: $279.5] million increase in our Same Store [removed: Facilities,] [added: Facilities] and a [removed: $160.5] [added: $157.9] million increase in our [removed: Non-Same] [added: non-Same] Store [removed: Facilities (as defined below).][added: Facilities.]

Revenues for the Same Store Facilities increased [removed: 10.5%] [added: 10.6%] or [removed: $262.7] [added: $265.8] million in 2021 as compared to 2020, due primarily to higher realized annual rent per available square foot and weighted average square foot occupancy.

Cost of operations for the Same Store Facilities decreased by [removed: 2.0%] [added: 1.9%] or [removed: $14.2] [added: $13.8] million in 2021 as compared to 2020, due primarily to (i) a 36.1% ($22.4 million) decrease in marketing expenses and (ii) an 11.2% ($14.4 million) decrease in on-site property manager payroll.

The increase in net operating income of [removed: $160.5] [added: $157.9] million for the Non-Same Store Facilities is due primarily to the impact of facilities acquired in 2021 and 2020 and the fill-up of recently developed and expanded facilities.

Operating Results for [removed: 2020] [added: 2022] and [removed: 2019][added: 2021]

In [removed: 2020,] [added: 2022,] net income allocable to our common shareholders was [removed: $1,098.3] [added: $4,142.3] million or [removed: $6.29] [added: $23.50] per diluted common share, compared to [removed: $1,272.8] [added: $1,732.4] million or [removed: $7.29] [added: $9.87] per diluted common share in [removed: 2019,] [added: 2021,] representing [removed: a decrease] [added: an increase] of [removed: $174.4] [added: $2,409.9] million or [removed: $1.00] [added: $13.63] per diluted common share.

The [removed: $8.0] [added: $614.3] million [removed: decrease] [added: increase] in self-storage net operating income [added: in 2022 as compared to 2021] is a result of a [removed: $39.4] [added: $370.1] million [removed: decrease in] [added: increase attributable to] our Same Store [removed: Facilities, offset partially by] [added: Facilities and] a [removed: $31.4] [added: $244.2] million increase [removed: in] [added: attributable to] our [removed: non-Same Store Facilities.][added: non-same store facilities.]

Cost of operations for the Same Store Facilities increased by [removed: 2.7%] [added: 5.7%] or [removed: $18.8] [added: $39.9] million in [removed: 2020] [added: 2022] as compared to [removed: 2019,] [added: 2021,] due primarily to [removed: a 22.6% ($11.4 million) increase in marketing expenses, a 3.0% ($7.6 million) increase in] [added: increased] property tax expense, [removed: and a 2.3% ($2.9 million) increase in] on-site property manager payroll [removed: expense.][added: expense, marketing expense, other direct property costs, and centralized management costs.]

The increase in net operating income of [removed: $31.4] [added: $244.2] million for the [removed: non-Same Store Facilities] [added: non-same store facilities] is due primarily to the impact of facilities acquired in [removed: 2020 and 2019] [added: 2021] and the fill-up of recently developed and expanded facilities.

Funds from Operations (“FFO”) and FFO per share are non-GAAP measures defined by [removed: the National Association of Real Estate Investment Trusts and are considered helpful measures of REIT performance by REITs and many REIT analysts.][added: Nareit.]

For the year ended December 31, [removed: 2021,] [added: 2022,] FFO was [removed: $13.36] [added: $16.46] per diluted common [removed: share,] [added: share] as compared to [removed: $9.75] [added: $13.36] and [removed: $10.58] [added: $9.75] per diluted common share for the years ended December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] respectively, representing an increase in [removed: 2021] [added: 2022] of [removed: 37.0%] [added: 23.2%,] or [removed: $3.61] [added: $3.10] per diluted common share, as compared to [removed: 2020.][added: 2021.]

The following [removed: tables reconcile] [added: table reconciles net income to FFO and Core FFO and reconciles] diluted earnings per share to FFO per share and [removed: set forth the computation of] [added: Core] FFO per share:

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

| | | | [added: | | | | | | | | | | | | | | | | | | 2022 | | | | | |] 2021 | | | | | | [added: Change | | | | | | 2021 | | | | | |] 2020 | | | | | | [removed: 2019] [added: Change] | | |

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

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

| Diluted [removed: Earnings] [added: earnings] per [removed: Share] [added: share] | | | [added: | | | | | | | | | | | | | | | | | |] $ | [added: 23.50 | | | | | $ |] 9.87 | | | | | [added: 138.1 | | % | | | |] $ | [removed: 6.29] [added: 9.87] | | | | | $ | [removed: 7.29] [added: 6.29] | | [added: | | | 56.9 | | % |]

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

| Depreciation and amortization | | | [added: | | | | | | | | | | | | | | | | | | 5.27 | | | | | |] 4.44 | | | | | | [added: | | | | | | 4.44 | | | | | |] 3.53 | | | | | | [removed: 3.32] | | |

| Gains on sale of real estate investments, including our equity share from investments | | | [added: | | | | | | | | | | | | | | | | | | (0.31) | | | | | |] (0.95) | | | | | | [added: | | | | | | (0.95) | | | | | |] (0.07) | | | | | | [removed: (0.03)] | | |

| FFO per share | | | [added: | | | | | | | | | | | | | | | | | |] $ | [added: 16.46 | | | | | $ |] 13.36 | | | | | [added: 23.2 | | % | | | |] $ | [removed: 9.75] [added: 13.36] | | | | | $ | [removed: 10.58] [added: 9.75] | | [added: | | | 37.0 | | % |]

| Net income allocable to common shareholders | | | [added: | | | | | | | | | | | | | | | | | |] $ | [added: 4,142,288 | | | | | $ |] 1,732,444 | | | | | [added: 139.1 | | % | | | |] $ | [removed: 1,098,335] [added: 1,732,444] | | | | | $ | [removed: 1,272,767] [added: 1,098,335] | | [added: | | | 57.7 | | % |]

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

| Depreciation and amortization | | | [added: | | | | | | | | | | | | | | | | | | 881,569 | | | | | |] 709,349 | | | | | | [added: | | | | | | 709,349 | | | | | |] 549,975 | | | | | | [removed: 511,413] | | |

| Depreciation from unconsolidated real estate investments | | | [added: | | | | | | | | | | | | | | | | | | 54,822 | | | | | |] 73,729 | | | | | | [added: | | | | | | 73,729 | | | | | |] 70,681 | | | | | | [removed: 71,725] | | |

| Depreciation allocated to noncontrolling interests and restricted share unitholders | | | [added: | | | | | | | | | | | | | | | | | | (6,622) | | | | | |] (4,415) | | | | | | [added: | | | | | | (4,415) | | | | | |] (3,850) | | | | | | [removed: (4,208)] | | |

| Gains on sale of real estate investments, including our equity share from investments | | | [added: | | | | | | | | | | | | | | | | | | (54,403) | | | | | |] (165,272) | | | | | | [added: | | | | | | (165,272) | | | | | |] (12,791) | | | | | | [removed: (5,896)] | | |

| FFO allocable to common shares | | | [added: | | | | | | | | | | | | | | | | | |] $ | [added: 2,900,815 | | | | | $ |] 2,345,835 | | | | | [added: 23.7 | | % | | | |] $ | [removed: 1,702,350] [added: 2,345,835] | | | | | $ | [removed: 1,845,801] [added: 1,702,350] | | [added: | | | 37.8 | | % |]

the buildings acquired.

Demand and operating trends softened in the second half of 2022 and returned to historical seasonal patterns as compared to what we experienced in 2020 and 2021.

We expect the trends to continue in 2023.

Since the beginning of 2020, we acquired a total of 368 facilities with 31.7 million net rentable square feet for $6.6 billion.

During 2022, net operating income generated by our Acquired Facilities and Newly Developed and Expanded Facilities increased 98.2% ($226.3 million), as compared to 2021.

We have experienced recent inflationary impacts on our cost of operations, including labor, utilities, and repairs and maintenance, and costs of development and expansion activities, and we may continue to experience such impacts in the future.

We have implemented various initiatives to manage the adverse impacts, such as enhancements in operational processes and investments in technology to reduce payroll hours, achievement of economies of scale from recent acquisitions with supervisory payroll allocated over a broader number of self-storage facilities, and investments in solar power and LED lights to lower utility usage.

On April 24, 2022, PSB entered into an Agreement and Plan of Merger whereby affiliates of Blackstone Real Estate (“Blackstone”) agreed to acquire all outstanding shares of PSB’s common stock for $187.50 per share in cash.

On July 20, 2022, PSB announced that it completed the merger transaction with Blackstone.

Each share of PSB common stock and each common unit of partnership interest we held in PSB were converted into the right to receive the merger consideration of $187.50 per share or unit, including a $5.25 closing cash dividend per share or unit, and a $0.22 prorated quarterly cash dividend per share or unit, for a total of $187.72 per share or unit.

At the close of the merger transaction, we received a total of $2.7 billion of cash proceeds and recognized a gain of $2.1 billion, which was classified within gain on sale of our equity investment in PS Business Parks, Inc. in the Consolidated Statement of Income.

In connection with the sale of our equity investment in PSB, on August 4, 2022, we paid a special cash dividend of $13.15 per common share, totaling approximately $2.3 billion, to shareholders of record as of August 1, 2022.

On February 5, 2023, we disclosed that we made a proposal to acquire all of the outstanding shares and units of Life Storage for consideration consisting of Public Storage common shares at an exchange ratio of 0.4192 Public Storage common shares for each outstanding Life Storage share or unit.

Our public offer followed prior rebuffs by Life Storage of our attempts to negotiate privately.

For more detail about the proposal, please see our Current Report on Form 8-K filed with the SEC on February 6, 2023.

On February 16, 2023, Life Storage announced it had rejected the offer.

We currently

intend to pursue the proposed transaction.

In the event we enter into and consummate an acquisition of Life Storage, the acquisition would have a significant impact on our future results of operations.

On February 4, 2023, our Board of Trustees declared a 50% increase in its regular common quarterly dividend from $2.00 to $3.00 per share, payable on March 30, 2023 to shareholders of record as of March 15, 2023.

The distribution equates to an annualized increase to the Company’s regular common dividend from $8.00 to $12.00 per share.

The increase is due primarily to (i) a $2.1 billion gain on sale of our equity investment in PSB and (ii) a $614.3 million increase in self-storage net operating income, partially offset by (iii) a $174.7 million increase in depreciation and amortization expense, (iv) a $125.1 million decrease in equity in earnings of unconsolidated real estate entities due to sale of our equity investment in PSB, and (v) a $45.5 million increase in interest expense.

Revenues for the Same Store Facilities increased 14.8% or $409.9 million in 2022 as compared to 2021, due primarily to higher realized annual rent per occupied square foot, partially offset by a decline in occupancy.

We believe that FFO and FFO per share are useful to REIT investors and analysts in measuring our performance because Nareit’s definition of FFO excludes items included in net income that do not relate to or are not indicative of our operating and financial performance.

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

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

| Gain on sale of equity investment in PS Business Parks, Inc. | | | | | | | | | | | | | | | | | | | | | (2,116,839) | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | |

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

| Gain on sale of equity investment in PS Business Parks, Inc. | | | | | | | | | | | | | | | | | | | | | (12.00) | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | | | |

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

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

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

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

| Same Store Facilities | | | | | | | | | | | | | | | | | | | | | $ | 3,175,207 | | | | | $ | 2,765,263 | | | | | 14.8 | | % | | | | $ | 2,765,263 | | | | | $ | 2,499,486 | | | | | 10.6 | | % |

| Acquired Facilities | | | | | | | | | | | | | | | | | | | | | 402,892 | | | | | | 161,364 | | | | | | 149.7 | | % | | | | 161,364 | | | | | | 11,365 | | | | | | 1319.8 | | % |

| Newly Developed and Expanded Facilities | | | | | | | | | | | | | | | | | | | | | 269,245 | | | | | | 197,058 | | | | | | 36.6 | | % | | | | 197,058 | | | | | | 145,360 | | | | | | 35.6 | | % |

| Other Non-Same Store Facilities | | | | | | | | | | | | | | | | | | | | | 98,684 | | | | | | 79,881 | | | | | | 23.5 | | % | | | | 79,881 | | | | | | 65,419 | | | | | | 22.1 | | % |

| Same Store Facilities | | | | | | | | | | | | | | | | | | | | | 738,491 | | | | | | 698,629 | | | | | | 5.7 | | % | | | | 698,629 | | | | | | 712,390 | | | | | | (1.9) | | % |

| Acquired Facilities | | | | | | | | | | | | | | | | | | | | | 135,911 | | | | | | 57,921 | | | | | | 134.6 | | % | | | | 57,921 | | | | | | 6,742 | | | | | | 759.1 | | % |

In addition, we may not have identified all current facts and circumstances that may affect impairment.

Any unidentified impairment loss, or change in conclusions, could have a material adverse impact on our net income.

comparable land market data.

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.

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.

The decrease is due primarily to (i) a $105.8 million increase in foreign currency exchange losses associated with our Euro denominated 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.

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

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| Computation of FFO per Share: | | | | | | | | | | | | | | | | | |

The following table reconciles FFO per share to Core FFO per share and FFO to Core FFO, respectively:

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

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

| FFO per share | | | $ | 13.36 | | | | | $ | 9.75 | | | | | 37.0 | | % | | | | $ | 9.75 | | | | | $ | 10.58 | | | | | (7.8) | | % |

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

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

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

(a)Preferred share redemption charge was presented in allocation of net income to preferred shareholders - redemption and equity in earnings of unconsolidated real estate entities on the Consolidated Statements of Income for the years ended December 31, 2021, 2020, and 2019.

| Same Store facilities | | | $ | 2,767,577 | | | | | $ | 2,504,919 | | | | | 10.5 | | % | | | | $ | 2,504,919 | | | | | $ | 2,525,572 | | | | | (0.8) | | % |

| Acquired facilities | | | 203,331 | | | | | | 42,699 | | | | | | 376.2 | | % | | | | 42,699 | | | | | | 12,704 | | | | | | 236.1 | | % |

| Newly developed and expanded facilities | | | 205,068 | | | | | | 149,086 | | | | | | 37.6 | | % | | | | 149,086 | | | | | | 121,378 | | | | | | 22.8 | | % |

| Same Store facilities | | | 697,244 | | | | | | 711,451 | | | | | | (2.0) | | % | | | | 711,451 | | | | | | 692,656 | | | | | | 2.7 | | % |

| Acquired facilities | | | 71,407 | | | | | | 20,065 | | | | | | 255.9 | | % | | | | 20,065 | | | | | | 5,178 | | | | | | 287.5 | | % |

| Other non-same store facilities | | | 9,762 | | | | | | 9,583 | | | | | | 1.9 | | % | | | | 9,583 | | | | | | 9,533 | | | | | | 0.5 | | % |

| Same Store facilities | | | 2,070,333 | | | | | | 1,793,468 | | | | | | 15.4 | | % | | | | 1,793,468 | | | | | | 1,832,916 | | | | | | (2.2) | | % |

| Acquired facilities | | | 131,924 | | | | | | 22,634 | | | | | | 482.9 | | % | | | | 22,634 | | | | | | 7,526 | | | | | | 200.7 | | % |

| Newly developed and expanded facilities | | | 131,451 | | | | | | 82,642 | | | | | | 59.1 | | % | | | | 82,642 | | | | | | 66,329 | | | | | | 24.6 | | % |

| Same Store facilities | | | (447,599) | | | | | | (445,756) | | | | | | 0.4 | | % | | | | (445,756) | | | | | | (434,150) | | | | | | 2.7 | | % |

| Acquired facilities | | | (183,086) | | | | | | (32,939) | | | | | | 455.8 | | % | | | | (32,939) | | | | | | (12,883) | | | | | | 155.7 | | % |

| Newly developed and expanded facilities | | | (61,645) | | | | | | (53,621) | | | | | | 15.0 | | % | | | | (53,621) | | | | | | (46,340) | | | | | | 15.7 | | % |

| Other non-same store facilities | | | (21,098) | | | | | | (20,941) | | | | | | 0.7 | | % | | | | (20,941) | | | | | | (19,545) | | | | | | 7.1 | | % |

| Same Store facilities | | | 1,622,734 | | | | | | 1,347,712 | | | | | | 20.4 | | % | | | | 1,347,712 | | | | | | 1,398,766 | | | | | | (3.6) | | % |

| Acquired facilities | | | (51,162) | | | | | | (10,305) | | | | | | 396.5 | | % | | | | (10,305) | | | | | | (5,357) | | | | | | 92.4 | | % |

| Newly developed and expanded facilities | | | 69,806 | | | | | | 29,021 | | | | | | 140.5 | | % | | | | 29,021 | | | | | | 19,989 | | | | | | 45.2 | | % |

| Other non-same store facilities | | | (3,270) | | | | | | (5,598) | | | | | | (41.6) | | % | | | | (5,598) | | | | | | (4,180) | | | | | | 33.9 | | % |

| Acquired facilities | | | 338 | | | | | | 106 | | | | | | 218.9 | | % | | | | 106 | | | | | | 44 | | | | | | 140.9 | | % |

Our [removed: debt] [added: debt, which totals approximately $6.9 billion at December 31, 2022,] is [removed: our] [added: the] only market-risk sensitive portion of our capital [removed: structure, which totals approximately $7.5 billion at December 31, 2021.][added: structure.]

The fair value of our debt at December 31, [removed: 2021] [added: 2022] is approximately [removed: $7.6] [added: $6.0] billion.

The table below summarizes the annual maturities of our debt, which had a weighted average effective rate of [removed: 1.8%] [added: 2.0%] at December 31, [removed: 2021.][added: 2022.]

See Note 7 to our December 31, [removed: 2021] [added: 2022] consolidated financial statements for further information regarding our debt (amounts in thousands).

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2024] [added: 2025] | | | | | | [removed: 2025] [added: 2026] | | | | | | [removed: 2026] [added: 2027] | | | | | | Thereafter | | | | | | Total | | |

We have foreign currency exposure at December 31, [removed: 2021] [added: 2022] related to (i) our investment in Shurgard, with a book value of [removed: $313.5] [added: $275.8] million, and a fair value of [removed: $2.0] [added: $1.4] billion based upon the closing price of Shurgard’s stock on December 31, [removed: 2021,] [added: 2022,] and (ii) €1.5 billion ($1.7 billion) of Euro-denominated unsecured notes payable, providing a natural hedge against the fair value of our investment in Shurgard.

| Debt | | | $ | 8,270 | | | | | $ | 807,159 | | | | | $ | 259,170 | | | | | $ | 1,150,138 | | | | | $ | 500,140 | | | | | $ | 4,185,709 | | | | | $ | 6,910,586 | |

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

[removed: All statements in this document, other than] [added: Such] statements [removed: of historical fact,] are [removed: forward-looking statements] [added: based on management’s beliefs] and [added: assumptions made based on information currently available to management and] may be identified by the use of the words [removed: "expects," "believes," "anticipates," "should," "estimates"] [added: “expects,” “believes,” “anticipates,” “should,” “estimates,”] and similar expressions.

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 [removed: levels] [added: levels,] and insurance, [added: our ability to consummate acquisition transactions, including our proposed acquisition of Life Storage, and to realize the intended benefits of such transactions,] adverse economic effects from the COVID-19 [removed: Pandemic] [added: Pandemic, international military conflicts,] or similar [added: events impacting] public health [removed: events,] [added: and/or economic activity,] increases in the costs of our primary customer acquisition channels, [added: adverse impacts to us and our customers from inflation,] 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, [removed: systems] [added: systems,] or technology.

We expressly disclaim any obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, new estimates, or other factors, [removed: events] [added: events,] or circumstances after the date of these forward looking statements, except when expressly required by law.

Public Storage (referred to herein as [removed: “the Company”, “we”, “us”,] [added: the “Company,” “we,” “us,”] or “our”), a Maryland [removed: REIT,] [added: real estate investment trust that has elected to be taxed as a real estate investment trust (“REIT”),] was organized in 1980.

Our principal business activities include the [removed: ownership] [added: ownership, development,] and operation of self-storage facilities and other related operations including tenant reinsurance and third-party self-storage management.

We are the industry leading owner and operator of self-storage [removed: properties] [added: properties,] with [removed: a recognizable brand, including] the [removed: ubiquitous orange color, which is one of the] most [removed: recognizable within] [added: recognized brand in] the [removed: industry.][added: self-storage industry, including our ubiquitous orange color.]

We acquire, develop, [removed: own] [added: own,] and operate self-storage facilities, which offer storage spaces for lease on a month-to-month basis, for personal and business use.

We are the largest owner and operator of self-storage facilities in the United States [removed: ("U.S.")] [added: (“U.S.”),] with physical presence in most major markets and [removed: 39] [added: 40] states.

We believe our scale, brand [removed: name] [added: name,] and technology platform afford us competitive advantages.

At December 31, [removed: 2021,] [added: 2022,] we held interests in and consolidated [removed: 2,787] [added: 2,869] self-storage facilities (an aggregate of [removed: 198] [added: 204] million net rentable square feet of space) operating under the Public Storage® name.

[removed: Our] [added: We manage insurance programs whereby] customers [added: at our facilities, including those we manage for third parties,] have the option of purchasing insurance from a non-affiliated insurance company to cover certain losses to their [removed: goods] stored [removed: at our facilities, as well as those we manage for third parties.][added: goods.]

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

At December 31, [removed: 2021,] [added: 2022,] there were approximately 1.2 million certificates of insurance held by our self-storage customers, representing aggregate coverage of approximately [removed: $4.9] [added: $5.6] billion.

At December 31, [removed: 2021,] [added: 2022,] we managed [removed: 93] [added: 114] facilities for third parties, and were under contract to manage [removed: 59] [added: 78] additional facilities including [removed: 54] [added: 73] facilities that are currently under construction.

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

At December 31, [removed: 2021,] [added: 2022,] Shurgard owned and operated [removed: 253] [added: 266] self-storage facilities [removed: (14] [added: (15] million net rentable square feet) located in seven countries in Western Europe under the Shurgard® name.

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

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

On our website, www.publicstorage.com, we make available, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, definitive proxy statements, and other reports required to be filed with [added: or furnished to] the SEC, as well as all [added: supplements and] amendments to those [removed: reports] [added: filings,] as soon as reasonably practicable after the [removed: reports] [added: filings, supplements,] 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 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: 19%,] [added: 20%,] with the remaining [removed: 81%] [added: 80%] owned by regional and local operators.

We believe our Public Storage® brand [removed: awareness is] [added: awareness, as well as our digital customer experience described below, provide us with] a competitive advantage in acquiring [added: and retaining] customers relative to other self-storage operators.

Our facilities compete with nearby self-storage facilities owned by other [removed: operators using] [added: operators, who use] marketing channels, including Internet advertising, signage, and [removed: banners] [added: banners,] and [removed: offering] [added: offer] services similar to ours.

As a result, competition is significant and affects the occupancy levels, rental rates, rental [removed: income] [added: income,] and operating expenses of our facilities.

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

Convenient shopping experience: Customers can conveniently shop for available storage space, reviewing attributes such as facility location, size, amenities [removed: such as climate-control, as well] [added: (such] as [removed: pricing,] [added: climate-control), and pricing] through the following marketing channels:

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

Approximately [removed: 76%] [added: 79%] of our move-ins in [removed: 2021] [added: 2022] were sourced through our website and we believe that many of our other customers who reserved directly through our customer care center or arrived at a facility and [added: moved in without a reservation, have reviewed our pricing and availability online through our website.]

We seek to [removed: regularly] update the structure, layout, and content of our website [added: regularly] in order to enhance our placement in “unpaid” search in Google and related websites, to improve the efficiency of our bids in “paid” search campaigns, and to maximize users’ likelihood of reserving space on our website.

[removed: In 2021, we added] [added: We also have] live [removed: internet] [added: Internet] chat capability as another channel for our customers to engage our agents, cost effectively improving customer responsiveness.

- Our Properties: Customers can also shop [added: for available space] at any one of our facilities.

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

Public Storage App: [removed: During the fourth quarter of 2020, we implemented] [added: We maintain] an industry leading customer smartphone application.

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

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 services.

While our long-term strategy includes each of these elements, in the short [removed: run] [added: term] the level of growth in our asset base in any period is dependent upon the cost and availability of capital, as well as the relative attractiveness of available investment alternatives.

[removed: We maximize revenues through striking the appropriate balance between occupancy and rates to new and existing] 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.

The size and scope of our operations have enabled us to achieve high operating margins and a low level of administrative costs relative to revenues through the centralization of many functions, such as facility maintenance, employee compensation and benefits programs, revenue management, [removed: as well as] [added: and] the development and documentation of standardized operating procedures.

Acquire existing properties: We seek to capitalize on the fragmentation of the self-storage [removed: business] [added: industry] 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 [added: acquisition opportunities.]

Our aggressiveness in bidding for particular marketed facilities depends upon many factors including the potential for future growth, the quality of construction and location, the cash flow we expect from the facility when operated on our platform, how well the facility fits into our current geographic footprint, [removed: as well as] [added: and] our return on capital expectations.

Forward-looking statements include statements relating to our 2023 outlook and all underlying assumptions, our proposal to acquire Life Storage, Inc. (“Life Storage”), our expected acquisition, disposition, development, and redevelopment activity, supply and demand for our self-storage facilities, information relating to operating trends in our markets, expectations regarding operating expenses, including property tax changes, expectations regarding the impacts from inflation and a potential future recession, our strategic priorities, expectations with respect to financing activities, rental rates, cap rates, and yields, leasing expectations, our credit ratings, and all other statements other than statements of historical fact.

This subsidiary receives from the non-affiliated insurance company reinsurance premiums substantially equal to the premiums collected from our tenants.

We previously held a significant equity interest in PS Business Parks, Inc. (“PSB”), which we sold in July 2022 in connection with PSB’s merger with an unaffiliated third party.

More than half of customers utilized our eRental® process during 2022.

Centralized information network: Our centralized reporting and information network enables us to identify changing market conditions and operating trends and analyze customer data.

We maximize revenues through striking the appropriate balance between occupancy and rates to new and existing

Our commitment to diversity and inclusion makes us a stronger company and instills a sense of pride across our teams as we serve our customers.

This commitment extends not just throughout Public Storage but across the real estate industry.

In this regard, in 2022, we made a founding donor contribution to the Nareit Dividends through Diversity, Equity & Inclusion Giving Campaign, which is directed at taking actionable and sustainable measures that support the recruitment, inclusion, development, and advancement of women, black professionals, other people of color, ethnically diverse individuals, and members of other under-represented groups in REITs and the publicly traded real estate industry.

We publicly disclose our annual Consolidated EEO-1 report, which reflects the race, ethnicity, and gender composition of our workforce, on the Investor Relations section of our website.

We communicate through various channels, including email communications, a monthly newsletter and town halls, where we provide employees company strategy and performance updates, employee recognitions and other information and the opportunity to ask questions of our leaders.

In 2022, 85% of our employees participated in our employee engagement survey, an increase from 80% in 2021, and we achieved employee engagement of 76%.

We are committed to continuous listening and improvement for our employees, and our feedback tools have guided enhancements for our employees, including the development of additional career progression opportunities and enhancements to our employee compensation and benefits programs.

Among other recognitions, we are proud to be named in 2022 a Great Place to Work® and included on the 2022 Forbes and Statista “America’s Best Large Employers” award list.

We have also been recognized by Comparably, Inc. as a “Choice Employer” with an “A+” Culture Score based on employee responses across 18 culture metrics, among other recognitions.

We are committed to providing safe self-storage facilities for our customers and employees.

We conduct monthly safety trainings at all of our properties and an annual safety training at our headquarters.

We did not have any fatal injuries in 2022 and we publicly disclose our employee health and safety data in our annual Sustainability Report.

We provide robust training and development programs across all levels of Public Storage that are intended to provide our employees with the skills, tools, and knowledge they need to not only grow as individuals but also contribute to the value of the organization through strong engagement.

We provide a hands-on new hire training program that provides close coaching and development.

We also provide numerous career development opportunities for existing employees across Public Storage, including management training programs.

Additionally, in 2022, we began development of a new leadership accelerator program for women and diverse employees, which includes individual mentorship and hands-on experiences directed at further enhancing our bench of women and minority leaders and management succession planning.

On average, one to two Public Storage employees operate each property at any given time, and our customers are only occasionally on-site because they do not work or reside there.

As a result, our properties consume less energy, emit less carbon, use less water, and produce less waste relative to other real estate types.

\- *Proactive Initiatives.* Despite our light environmental footprint, we proactively strive to reduce our impact further through initiatives such as “on demand” LED lighting, solar power generation, and low-water-use landscaping.

These are environmentally friendly initiatives that also generate economic returns on invested capital.

Additionally, we have recently partnered with The BRE Group to develop a green building certification program for self-storage facilities in the U.S. through its BREEAM® validation and certification system.

reputational risks.

We are addressing potential heat stress risks (e.g., higher energy costs, more frequent power outages, and impacts on our customers and workforce) through initiatives such as converting to LED lighting, solar power generation installation, and analyzing battery storage and microgrids.

We are addressing potential water stress risks (e.g., increased costs and decreased availability) through initiatives such as efficient plumbing systems, low-water use irrigation systems, drought tolerant and native landscaping, water run-off controls, and storm water retention.

We address the remaining risks primarily through natural disaster resilient development, redevelopment, and capital expenditures.

Our commitment includes:

- expanding our greenhouse gas emissions inventory to include Scopes 1, 2, and 3 for the entire portfolio;

- analyzing opportunities to work with our vendors and suppliers on emissions;

- enhancing our internal processes and controls in anticipation of forthcoming SEC climate disclosure rules;

- continuing to enhance our environmental management system to further infuse sustainability across our organization, enhance our program, and bolster the results of our sustainability efforts;

- continuing to provide regular updates to our stakeholders on our ongoing efforts through our annual Sustainability Report; and

- continuing publicly to disclose detailed information on our greenhouse gas emissions (consistent with TCFD standards), including through the Carbon Disclosure Project, as well as information on energy and water usage, green energy generation, and similar metrics.

Cybersecurity

Public Storage devotes significant resources to protecting and continuing to improve the security of our computer systems, software, networks, and other technology assets.

PSB is a publicly held REIT 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, 2021, PSB owned and operated 28 million rentable square feet of commercial space.

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

Approximately half of customers elected this “eRental®” process during 2021.

acquisition opportunities.

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

Our commitment to diversity and inclusion transcends the organization and drives everything we do, from the people we hire, to the business decisions we make.

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.

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

We communicate through various channels, such as monthly meetings, frequent email communications and updates from our management team, company intranet postings, engagement surveys, and monthly newsletters.

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

It contains a CEO message, recognizes employee achievements and promotions, and provides company strategy and performance updates, health and wellness tips, and other pertinent information.

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

All new hires in our field and customer care center operations complete robust training programs designed to help them quickly learn and operate in the self-storage business.

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.

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.

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.

We also maintain a six-month development program to develop senior district managers.

In addition to these structured programs, we also offer ongoing training, development, and leadership programs for our entire workforce designed to facilitate professional growth and career advancement.

Our leadership development programs bring together senior leaders and leaders-in-training to teach management skills and strategies and ensure our new leaders have a clear understanding of their role, a strong bond with their peers, and an expanded professional network.

Our online training and development platform also allows us to reinforce our culture of ongoing recognition by providing a means to show appreciation to others across all levels of the business by awarding employee recognition badges such as the team player or appreciation badges.

Over 78,000 badges were awarded in 2021, 46% more than in 2020.

We believe every employee should know where they stand and how they can be successful in their career at Public Storage.

Our People Power our Brand

Every day, our teammates deliver the Public Storage brand and experience to our customers through countless personal interactions.

While we enthusiastically celebrate our ability to bring self-storage solutions to our customers where and how they are needed, we recognize that our most important asset in doing so is our people behind the orange door.

The risks we are more commonly exposed to and seek to mitigate include flooding and storm damage in the southern and eastern United States and wildfires in the western United States.

We actively engage in

identifying and acting upon the opportunities associated with these risks including LED lighting, solar power generation, low-water-use landscaping, and enhancing our broader enterprise risk management framework.

Moreover, we are committed to improving our climate initiatives and long-term sustainability strategies, including:

- proactively evaluating our building prototype and design standards for opportunities to further reduce our environmental impact, including an effort underway to refine our green building implementation strategy in conjunction with U.S. Green Building Council through LEED© certification;

- prioritizing our understanding of Paris Climate Agreement and the potential paths towards a carbon neutral future; and

For the fiscal year ended December 31, [removed: 2021.][added: 2022.]

The aggregate market value of the voting and non-voting common shares held by non-affiliates of the Registrant as of June 30, [removed: 2021:][added: 2022:]

Common Shares, $0.10 par value per share – [removed: $45,156,391,000] [added: $47,054,755,000] (computed on the basis of [removed: $300.69] [added: $312.67] 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: 2021).][added: 2022).]

As of February [removed: 18, 2022,] [added: 16, 2023,] there were [removed: 175,462,248] [added: 175,757,442] outstanding Common Shares, $0.10 par value per share.

Portions of the definitive proxy statement to be filed in connection with the Annual Meeting of Shareholders to be held in [removed: 2022] [added: 2023] are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent described therein.

Public Storage

Form 10-K

For the Fiscal Year Ended December 31, 2022

TABLE OF CONTENTS

| | | | | | | | | |

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

| | | | | | | Page | | |

| Part I | | | | | | | | |

| [Item 1.](#idcbceb955cc148bc8844018cabe9b51f_172) | | | [Business](#idcbceb955cc148bc8844018cabe9b51f_172) | | | [1](#idcbceb955cc148bc8844018cabe9b51f_172) | | |

| [Item 1A.](#idcbceb955cc148bc8844018cabe9b51f_175) | | | [Risk Factors](#idcbceb955cc148bc8844018cabe9b51f_175) | | | [10](#idcbceb955cc148bc8844018cabe9b51f_175) | | |

| [Item 1B.](#idcbceb955cc148bc8844018cabe9b51f_178) | | | [Unresolved Staff Comments](#idcbceb955cc148bc8844018cabe9b51f_178) | | | [19](#idcbceb955cc148bc8844018cabe9b51f_178) | | |

| [Item 2.](#idcbceb955cc148bc8844018cabe9b51f_181) | | | [Properties](#idcbceb955cc148bc8844018cabe9b51f_181) | | | [20](#idcbceb955cc148bc8844018cabe9b51f_181) | | |

| [Item 3.](#idcbceb955cc148bc8844018cabe9b51f_184) | | | [Legal Proceedings](#idcbceb955cc148bc8844018cabe9b51f_184) | | | [21](#idcbceb955cc148bc8844018cabe9b51f_184) | | |

| [Item 4.](#idcbceb955cc148bc8844018cabe9b51f_187) | | | [Mine Safety Disclosures](#idcbceb955cc148bc8844018cabe9b51f_187) | | | [21](#idcbceb955cc148bc8844018cabe9b51f_187) | | |

| | | | | | | | | |

| Part II | | | | | | | | |

| [Item 5.](#idcbceb955cc148bc8844018cabe9b51f_193) | | | [Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](#idcbceb955cc148bc8844018cabe9b51f_193) | | | [22](#idcbceb955cc148bc8844018cabe9b51f_193) | | |

| [Item 6.](#idcbceb955cc148bc8844018cabe9b51f_196) | | | [\[Reserved\]](#idcbceb955cc148bc8844018cabe9b51f_196) | | | [22](#idcbceb955cc148bc8844018cabe9b51f_196) | | |

| [Item 7.](#idcbceb955cc148bc8844018cabe9b51f_91) | | | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#idcbceb955cc148bc8844018cabe9b51f_91) | | | [22](#idcbceb955cc148bc8844018cabe9b51f_91) | | |

| [Item 7A.](#idcbceb955cc148bc8844018cabe9b51f_136) | | | [Quantitative and Qualitative Disclosures about Market Risk](#idcbceb955cc148bc8844018cabe9b51f_136) | | | [50](#idcbceb955cc148bc8844018cabe9b51f_136) | | |

| [Item 8.](#idcbceb955cc148bc8844018cabe9b51f_199) | | | [Financial Statements and Supplementary Data](#idcbceb955cc148bc8844018cabe9b51f_199) | | | [50](#idcbceb955cc148bc8844018cabe9b51f_199) | | |

| [Item 9.](#idcbceb955cc148bc8844018cabe9b51f_202) | | | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](#idcbceb955cc148bc8844018cabe9b51f_202) | | | [50](#idcbceb955cc148bc8844018cabe9b51f_202) | | |

| [Item 9A.](#idcbceb955cc148bc8844018cabe9b51f_205) | | | [Controls and Procedures](#idcbceb955cc148bc8844018cabe9b51f_205) | | | [50](#idcbceb955cc148bc8844018cabe9b51f_205) | | |

| [Item 9B.](#idcbceb955cc148bc8844018cabe9b51f_211) | | | [Other Information](#idcbceb955cc148bc8844018cabe9b51f_211) | | | [53](#idcbceb955cc148bc8844018cabe9b51f_211) | | |

| [Item 9C.](#idcbceb955cc148bc8844018cabe9b51f_214) | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#idcbceb955cc148bc8844018cabe9b51f_214) | | | [53](#idcbceb955cc148bc8844018cabe9b51f_214) | | |

| | | | | | | | | |

| Part III | | | | | | | | |

| [Item 10.](#idcbceb955cc148bc8844018cabe9b51f_220) | | | [Trustees, Executive Officers and Corporate Governance](#idcbceb955cc148bc8844018cabe9b51f_220) | | | [54](#idcbceb955cc148bc8844018cabe9b51f_220) | | |

| [Item 11.](#idcbceb955cc148bc8844018cabe9b51f_223) | | | [Executive Compensation](#idcbceb955cc148bc8844018cabe9b51f_223) | | | [54](#idcbceb955cc148bc8844018cabe9b51f_223) | | |

| [Item 12.](#idcbceb955cc148bc8844018cabe9b51f_226) | | | [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](#idcbceb955cc148bc8844018cabe9b51f_226) | | | [54](#idcbceb955cc148bc8844018cabe9b51f_226) | | |

| [Item 13.](#idcbceb955cc148bc8844018cabe9b51f_229) | | | [Certain Relationships and Related Transactions and Trustee Independence](#idcbceb955cc148bc8844018cabe9b51f_229) | | | [55](#idcbceb955cc148bc8844018cabe9b51f_229) | | |

| [Item 14.](#idcbceb955cc148bc8844018cabe9b51f_232) | | | [Principal Accountant Fees and Services](#idcbceb955cc148bc8844018cabe9b51f_232) | | | [55](#idcbceb955cc148bc8844018cabe9b51f_232) | | |

| | | | | | | | | |

| Part IV | | | | | | | | |

| [Item 15.](#idcbceb955cc148bc8844018cabe9b51f_238) | | | [Exhibits and Financial Statement Schedules](#idcbceb955cc148bc8844018cabe9b51f_238) | | | [56](#idcbceb955cc148bc8844018cabe9b51f_238) | | |

At December 31, [removed: 2021,] [added: 2022,] we had controlling ownership interests in [removed: 2,787] [added: 2,869] self-storage facilities located in [removed: 39] [added: 40] states within the U.S.:

| Southern | | | 258 | | | | | | [removed: 19,221] [added: 19,159] | | |

| Northern | | | 182 | | | | | | [removed: 11,581] [added: 11,592] | | |

| New York | | | 69 | | | | | | [removed: 4,817] [added: 4,809] | | |

| South Carolina | | | [removed: 69] [added: 72] | | | | | | [removed: 4,095] [added: 4,312] | | |

| New Jersey | | | [removed: 58] [added: 60] | | | | | | [removed: 3,874] [added: 4,098] | | |

At December 31, [removed: 2021, 11] [added: 2022, five] of our facilities with a net book value of [removed: $66] [added: $17] million were encumbered by an aggregate of [removed: $23] [added: $10] million in mortgage notes payable.

| | | | At December 31, 2022 | | | | | | | | |

| Texas | | | 414 | | | | | | 35,191 | | |

| Florida | | | 338 | | | | | | 23,499 | | |

| Illinois | | | 133 | | | | | | 8,645 | | |

| Georgia | | | 122 | | | | | | 8,267 | | |

| North Carolina | | | 107 | | | | | | 7,848 | | |

| Maryland | | | 105 | | | | | | 7,678 | | |

| Colorado | | | 86 | | | | | | 6,414 | | |

| Minnesota | | | 65 | | | | | | 5,206 | | |

| Ohio | | | 60 | | | | | | 3,987 | | |

| Arizona | | | 56 | | | | | | 3,939 | | |

| Michigan | | | 51 | | | | | | 3,740 | | |

| Indiana | | | 46 | | | | | | 3,016 | | |

| Oklahoma | | | 36 | | | | | | 2,692 | | |

| Tennessee | | | 42 | | | | | | 2,625 | | |

| Oregon | | | 44 | | | | | | 2,566 | | |

| Pennsylvania | | | 35 | | | | | | 2,501 | | |

| Nevada | | | 32 | | | | | | 2,210 | | |

| Kansas | | | 24 | | | | | | 1,462 | | |

| Other states (14 states) | | | 139 | | | | | | 8,859 | | |

| Total (a) | | | 2,869 | | | | | | 204,217 | | |

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

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

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

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

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

| North Carolina | | | 103 | | | | | | 7,623 | | |

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

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

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

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

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

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

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

| 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 | | |

Our [removed: Common Shares] [added: common shares] of beneficial interest [removed: (the “Common Shares”)] (NYSE: PSA) have been listed on the NYSE since October 19, 1984.

As of February [removed: 18, 2022,] [added: 16, 2023,] there were approximately [removed: 10,524] [added: 10,071] holders of record of our [removed: Common Shares.][added: common shares.]

From the inception of the repurchase program through February [removed: 22, 2022,] [added: 21, 2023,] 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: 2021.][added: 2022.]

Not applicable

The financial statements and supplementary data appearing on pages F-3 to [removed: F-30] [added: F-34] are incorporated herein by reference.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports we file and submit under the Securities Exchange Act of 1934, as amended (the “Exchange [removed: Act”)] [added: Act”),] is recorded, processed, [removed: summarized] [added: summarized,] and reported within the time periods specified in accordance with SEC [removed: guidelines] [added: guidelines,] and that such information is communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure based on the definition [removed: of "disclosure] [added: “of disclosure] controls and [removed: procedures"] [added: procedures”] in Rules 13a-15(e) and 15d-15(e) of the Exchange Act.

In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control [removed: objectives] [added: objectives,] and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures in reaching that level of reasonable assurance.

We also have investments in certain unconsolidated real estate [removed: entities and] [added: entities, and,] because we do not control these entities, our disclosure controls and procedures with respect to such entities are substantially more limited than those we maintain with respect to our consolidated subsidiaries.

As of December 31, [removed: 2021,] [added: 2022,] 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: 2021,] [added: 2022,] at a reasonable assurance level.

[added: 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: 2021.][added: 2022.]

The effectiveness of internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] 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: 2021] [added: 2022] to which this report relates that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

We have audited Public Storage’s internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] 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).

In our opinion, Public Storage (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on the COSO criteria.

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: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of income, comprehensive income, equity and redeemable noncontrolling interests and cash flows for each of the three years in the period ended December 31, [removed: 2021] [added: 2022] and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February [removed: 22, 2022] [added: 21, 2023] expressed an unqualified opinion thereon.

Under the supervision and with the

February 21, 2023

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

February 22, 2022

Russell, Jr., age [removed: 62,] [added: 63,] has served as Chief Executive Officer since January 1, 2019, and as President since July 2016.

Mr. Russell has also served as a trustee of Public Storage since January 1, [removed: 2019, and as a director of PS Business Parks, Inc. since August 2003.][added: 2019.]

Thomas Boyle, age [removed: 39,] [added: 40,] has served as Chief Financial Officer since January 1, [removed: 2019, and was previously Vice President] [added: 2019] and Chief [removed: Financial Officer, Operations] [added: Investment Officer] since [removed: joining the Company in November 2016.][added: January 1, 2023.]

Vitan, age [removed: 48,] [added: 49,] has served as Senior Vice President, Chief Legal Officer and Corporate Secretary since April 20, 2019, and was [added: previously] Vice President and Chief Counsel–Litigation and Operations since joining the Company in June [removed: 2016.][added: 2016 until April 2019.]

Prior to joining Public Storage, Mr. Vitan was Assistant General Counsel for Altria Client [removed: Services, Inc.] [added: Services LLC from 2008 to 2016,] and [removed: served as] [added: before then was] a Trial [removed: Practice] and Appellate [removed: Litigation Attorney] [added: Practice attorney] at Latham & Watkins LLP.

[removed: Natalia] Johnson, age [removed: 44,] [added: 45,] has served as [removed: the] Chief Administrative Officer since August 4, 2020.

Previously, Ms. Johnson [removed: served as] [added: was] Senior Vice President, Chief Human Resources Officer from April [removed: 25,] 2018 [removed: to] [added: until] August [removed: 4, 2020] [added: 2020,] and [added: prior to that was] Senior Vice President of Human [removed: Resources from] [added: Resources, a position she held since joining the Company in] July [removed: 2016 to April 2018.][added: 2016.]

Prior to joining Public Storage, Ms. Johnson held a variety of senior management positions at Bank of America, including Chief Operating Officer for Mortgage Technology and Human Resources Executive for the Mortgage [removed: Business] [added: Business,] and worked for Coca-Cola Andina and San Cristόbal Insurance.

Other information required by this item is hereby incorporated by reference to the material appearing in the [added: Company’s] Notice and Proxy Statement for [removed: the 2022] [added: its 2023] Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A under the Exchange Act.

Previously, Mr. Boyle was Vice President and Chief Financial Officer, Operations, from November 2016, when he joined the Company, until January 2019.

Natalia N.

David Lee, age 47, has served as Chief Operating Officer since November 1, 2021 and as the Company’s principal operating officer since February 21, 2023.

Prior to joining Public Storage, Mr. Lee held various roles of increasing responsibility at The UPS Store since 2002, most recently as Senior Vice President of Operations.

The information required by this item is hereby incorporated by reference to the material appearing in the [added: Company’s] Notice and Proxy Statement for [removed: the 2022] [added: its 2023] Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A under the Exchange Act.

[removed: Information] [added: Other information] required by this item is hereby incorporated by reference to the material appearing in the [added: Company’s] Notice and Proxy Statement for [removed: the 2022] [added: its 2023] 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, 2022 on the Company’s equity compensation plans:

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

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

| Equity Compensation Plan Information | | | | | | | | | | | | | | | | | | | | |

| Plan Category | | | | | | 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 (excluding securities reflected in column (A)) | | |

| | | | (A) | | | | | | (B) | | | | | | (C) | | | | | |

| Equity compensation plans approved by security holders (a) | | | | | | 3,815,547 (b) | | | | | | $ 209.53 (c) | | | | | | 1,724,352 | | |

| Equity compensation plans not approved by security holders (d) | | | | | | — | | | | | | — | | | | | | — | | |

| Total | | | | | | 3,815,547 (b) | | | | | | $ 209.53 (c) | | | | | | 1,724,352 | | |

a)The Company’s equity compensation plans are described more fully in Note 11 to the December 31, 2022 financial statements.

All plans have been approved by the Company’s shareholders.

b)Includes (i) stock options to purchase 3,307,964 common shares, including performance-based stock options as to which the performance period had not ended or the Compensation Committee had not certified performance as of December 31, 2022, which stock options are reflected in the table above assuming a maximum payout, (ii) 498,032 restricted share units, including performance-based restricted share units as to which the performance period had not ended as of December 31, 2022, which restricted share units are reflected in the table above assuming a maximum payout, and (iii) 9,551 fully vested deferred share units.

All restricted share units, if and when vested, and all deferred share units will be settled in common shares on a one-for-one basis.

c)Represents the weighted average exercise price of stock options to purchase 1,854,041 common shares, excluding the performance-based stock options described in footnote (b), above.

The 498,032 restricted share units would vest for no consideration.

d)There were no securities outstanding or available for future issuance under equity compensation plans not approved by the Company’s shareholders.

The information required by this item is hereby incorporated by reference to the material appearing in the [added: Company’s] Notice and Proxy Statement for [removed: the 2022] [added: its 2023] 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 [added: Company’s] Notice and Proxy Statement for [removed: the 2022] [added: its 2023] Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A under the Exchange Act of 1934.

| 3.1 | | | [removed: [Restated](https://www.sec.gov/Archives/edgar/data/1393311/000156276221000166/psa-20210331xex3_1.htm) [Declaration] [added: [Restated Declaration] of Trust of Public Storage, a Maryland real estate investment trust. [removed: Filed with the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021 and incorporated by reference herein.](https://www.sec.gov/Archives/edgar/data/1393311/000156276221000166/psa-20210331xex3_1.htm)] [added: Filed](https://www.sec.gov/Archives/edgar/data/1393311/000139331123000012/psa-123122xex3_1restatedde.htm) [here](https://www.sec.gov/Archives/edgar/data/1393311/000139331123000012/psa-123122xex3_1restatedde.htm)[with](https://www.sec.gov/Archives/edgar/data/1393311/000139331123000012/psa-123122xex3_1restatedde.htm)[.](https://www.sec.gov/Archives/edgar/data/1393311/000139331123000012/psa-123122xex3_1restatedde.htm)] | | |

| 3.2 | | | [Amended and Restated Bylaws of Public Storage. Filed [removed: with] [added: as Exhibit 3.2 to] the [removed: Registrant’s] [added: Company’s] Quarterly Report on Form 10-Q for the [removed: quarterly period] [added: quarter] ended March 31, 2021 and incorporated [added: herein] by [removed: reference herein.](https://www.sec.gov/Archives/edgar/data/1393311/000156276221000166/psa-20210331xex3_2.htm)] [added: reference.](https://www.sec.gov/Archives/edgar/data/1393311/000156276221000166/psa-20210331xex3_2.htm)] | | |

| 3.3 | | | [Articles Supplementary for Public Storage 5.150% Cumulative Preferred Shares, Series F. Filed [removed: with] [added: as Exhibit 3.1 to] the [removed: Registrant’s] [added: Company’s] Current Report on Form 8-K dated May 23, 2017 and incorporated [added: herein] by [removed: reference herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312517181653/d403845dex31.htm)] [added: reference.](https://www.sec.gov/Archives/edgar/data/1393311/000119312517181653/d403845dex31.htm)] | | |

| 3.4 | | | [Articles Supplementary for Public Storage 5.050% Cumulative Preferred Shares, Series G. Filed [removed: with] [added: as Exhibit 3.1 to] the [removed: Registrant’s] [added: Company’s] Current Report on Form 8-K dated July 31, 2017 and incorporated [added: herein] by [removed: reference herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312517244616/d431375dex31.htm)] [added: reference.](https://www.sec.gov/Archives/edgar/data/1393311/000119312517244616/d431375dex31.htm)] | | |

| 3.5 | | | [Articles Supplementary for Public Storage 5.600% Cumulative Preferred Shares, Series H. Filed [removed: with] [added: as Exhibit 3.1 to] the [removed: Registrant’s] [added: Company’s] Current Report on Form 8-K dated February 28, 2019 and incorporated [added: herein] by [removed: reference herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519060872/d707503dex31.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519060872/d707503dex31.htm)] | | |

| 3.6 | | | [Articles Supplementary for Public Storage 4.875% Cumulative Preferred Shares, Series I. Filed [removed: with] [added: as Exhibit 3.1 to] the [removed: Registrant’s] [added: Company’s] Current Report on Form 8-K dated September 5, 2019 and incorporated [added: herein] by [removed: reference herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519240029/d95914dex31.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519240029/d95914dex31.htm)] | | |

| 3.7 | | | [Articles Supplementary for Public Storage 4.700% Cumulative Preferred Shares, Series J. Filed [removed: with] [added: as Exhibit 3.1 to] the [removed: Registrant’s] [added: Company’s] Current Report on Form 8-K dated November 5, 2019 and incorporated [added: herein] by [removed: reference herein](http://www.sec.gov/Archives/edgar/data/1393311/000119312519286081/d820234dex31.htm).] [added: reference.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519286081/d820234dex31.htm)] | | |

| 3.8 | | | [Articles Supplementary for Public Storage 4.750% Cumulative Preferred Shares, Series K. Filed [removed: with] [added: as Exhibit 3.1 to] the [removed: Registrant’s] [added: Company’s] Current Report on Form 8-K dated December 11, 2019 and incorporated [added: herein] by [removed: reference herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519312789/d847836dex31.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/1393311/000119312519312789/d847836dex31.htm)] | | |

| 3.9 | | | [Articles Supplementary for Public Storage 4.625% Cumulative Preferred Shares, Series L. Filed [removed: with] [added: as Exhibit 3.1 to] the [removed: Registrant’s] [added: Company’s] Current Report on Form 8-K dated June 8, 2020 and incorporated [added: herein] by [removed: reference herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312520165668/d941759dex31.htm)] [added: reference.](https://www.sec.gov/Archives/edgar/data/1393311/000119312520165668/d941759dex31.htm)] | | |

| 3.10 | | | [Articles Supplementary for Public Storage 4.125 % Cumulative Preferred Shares, Series M. Filed [removed: with] [added: as Exhibit 3.1 to] the [removed: Registrant’s] [added: Company’s] Current Report on Form 8-K dated August 11, 2020 and incorporated [added: herein] by [removed: reference herein](https://www.sec.gov/Archives/edgar/data/1393311/000119312520219127/d43890dex31.htm).] [added: reference.](https://www.sec.gov/Archives/edgar/data/1393311/000119312520219127/d43890dex31.htm)] | | |

| 3.11 | | | [Articles Supplementary for Public Storage 3.875% Cumulative Preferred Shares, Series N. Filed [removed: with] [added: as Exhibit 3.1 to] the [removed: Registrant’s] [added: Company’s] Current Report on Form 8-K dated September 29, 2020 and incorporated [added: herein] by [removed: reference herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312520259620/d824439dex31.htm)] [added: reference.](https://www.sec.gov/Archives/edgar/data/1393311/000119312520259620/d824439dex31.htm)] | | |

| 3.12 | | | [Articles Supplementary for Public Storage 3.900% Cumulative Preferred Shares, Series O. Filed [removed: with] [added: as Exhibit 3.1 to] the [removed: Registrant’s] [added: Company’s] Current Report on Form 8-K dated November 9, 2020 and incorporated [added: herein] by [removed: reference herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312520293004/d24818dex31.htm)] [added: reference.](https://www.sec.gov/Archives/edgar/data/1393311/000119312520293004/d24818dex31.htm)] | | |

| 3.13 | | | [Articles Supplementary for Public Storage 4.000% Cumulative Preferred Shares, Series P. Filed [removed: with] [added: as Exhibit 3.1 to] the Company’s Current Report on Form 8-K dated June 7, 2021 and incorporated [added: herein] by [removed: reference herein.](https://www.sec.gov/Archives/edgar/data/1393311/000119312521186733/d180655dex31.htm)] [added: reference.](https://www.sec.gov/Archives/edgar/data/1393311/000119312521186733/d180655dex31.htm)] | | |

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

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

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

| [removed: 4.1] [added: 4.2] | | | [Master Deposit Agreement, dated as of May 31, 2007. [removed: Filed with the Registrant’s] [added: Filed](http://www.sec.gov/Archives/edgar/data/1393311/000119312507130364/dex101.htm) [as Exhibit 10.1 to](http://www.sec.gov/Archives/edgar/data/1393311/000119312507130364/dex101.htm) [the](http://www.sec.gov/Archives/edgar/data/1393311/000119312507130364/dex101.htm) [Company](http://www.sec.gov/Archives/edgar/data/1393311/000119312507130364/dex101.htm)[’s] Current Report on Form 8-K dated June 6, 2007 and incorporated [added: herein] by [removed: reference herein.](http://www.sec.gov/Archives/edgar/data/1393311/000119312507130364/dex101.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/1393311/000119312507130364/dex101.htm)] | | |

| [removed: 4.2] [added: 4.1] | | | [Description of [removed: Registrant’s] [added: the Company’s] Securities Registered Pursuant to Section [removed: 12 of the] [added: 12](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm) [of](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm) [the] Securities Exchange Act of [removed: 1934. Filed herewith.](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm)] [added: 1934.](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm) [Filed](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm) [as Exhibit 4.2 to](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm) [the](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm) [Company’s Annual](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm) [Report on Form](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm) [10-K for the year ended December 31, 2021](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm) [and incorporated](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm) [herein](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm) [by](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm) [reference.](https://www.sec.gov/Archives/edgar/data/1393311/000139331122000010/psa-123121xex4_2.htm)] | | |

| 4.6 | | | [Third Supplemental Indenture, dated as of January 24, 2020, between Public Storage and Wells Fargo Bank, National Association, as [removed: trustee.] [added: trustee, including the form of Global Note representing the 2032 Notes.] Filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated January 24, 2020 and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/1393311/000119312520014211/d877682dex42.htm) | | |

| 4.7 | | | [Fourth Supplemental Indenture, dated as of January 19, 2021, between Public Storage and Wells Fargo Bank, National Association, as [removed: trustee.] [added: 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 January 14, 2021 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/0001393311/000119312521011436/d105642dex42.htm) | | |

| 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 [added: 2030] 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) | | |

| 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 [removed: reference](https://www.sec.gov/Archives/edgar/data/1393311/000119312521324419/d257375dex44.htm)[.](https://www.sec.gov/Archives/edgar/data/1393311/000119312521324419/d257375dex44.htm)] [added: reference.](https://www.sec.gov/Archives/edgar/data/1393311/000119312521324419/d257375dex44.htm)] | | |

| [removed: 10.4*] [added: 10.8*] | | | [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) | | |

| [removed: 10.5*] [added: 10.9*] | | | [Form of 2007 Plan Restricted Stock Unit Agreement [removed: – deferral] [added: (deferral] of receipt of [removed: shares.] [added: shares).] Filed as Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference](http://www.sec.gov/Archives/edgar/data/1393311/000139331116000036/psa-20151231ex101227ce4.htm). | | |

| [removed: 10.6*] [added: 10.10*] | | | [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) | | |

| [removed: 10.7*] [added: 10.11*] | | | [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) | | |

| [removed: 10.8*] [added: 10.12*] | | | [Form of 2016 Plan Restricted Stock Unit Agreement [removed: – deferral] [added: (deferral] of receipt of [removed: shares.] [added: 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) | | |

| [removed: 10.9*] [added: 10.13*] | | | [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) | | |

| [removed: 10.10] [added: 10.4] | | | [Form of Trustee and Officer Indemnification [removed: Agreement.](http://www.sec.gov/Archives/edgar/data/1393311/000139331117000008/psa-20161231xex10_19.htm) [Filed] [added: Agreement. Filed] as Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/1393311/000139331117000008/psa-20161231xex10_19.htm) | | |

| [removed: 10.11*] [added: 10.5*] | | | [Public Storage 2007 Equity and Performance-Based Incentive Compensation Plan, as [removed: Amended.] [added: Amended (2007 Plan).] Filed [removed: with Registrant’s] [added: as Exhibit 10.1 to the Company’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)] | | |

| [removed: 10.14] [added: 10.1] | | | [Note Purchase Agreement, dated as of November 3, 2015, by and among Public Storage and the signatories thereto. [removed: Filed with Registrant’s] [added: Filed](https://www.sec.gov/Archives/edgar/data/1393311/000139331115000031/psa-20151104ex101c7717b.htm) [as Exhibit 10.1 to the](https://www.sec.gov/Archives/edgar/data/1393311/000139331115000031/psa-20151104ex101c7717b.htm) [Company](https://www.sec.gov/Archives/edgar/data/1393311/000139331115000031/psa-20151104ex101c7717b.htm)[’s] Current Report on Form 8-K dated November 3, 2015 and incorporated herein by [removed: reference.](http://www.sec.gov/Archives/edgar/data/1393311/000139331115000031/psa-20151104ex101c7717b.htm)] [added: reference.](https://www.sec.gov/Archives/edgar/data/1393311/000139331115000031/psa-20151104ex101c7717b.htm)] | | |

| [removed: 10.15] [added: 10.2] | | | [Note Purchase Agreement, dated as of April 12, 2016, by and among Public Storage and the signatories thereto. [removed: Filed with Registrant’s] [added: Filed](https://www.sec.gov/Archives/edgar/data/1393311/000139331116000038/psa-20160413xex10_1.htm) [as Exhibit 10.1 to the Company](https://www.sec.gov/Archives/edgar/data/1393311/000139331116000038/psa-20160413xex10_1.htm)[’s] Current Report on Form 8-K dated April 12, 2016 and incorporated herein by [removed: reference.](http://www.sec.gov/Archives/edgar/data/1393311/000139331116000038/psa-20160413xex10_1.htm)] [added: reference.](https://www.sec.gov/Archives/edgar/data/1393311/000139331116000038/psa-20160413xex10_1.htm)] | | |

| [removed: 10.17*] [added: 10.14*] | | | [Form of 2016 Plan Restricted Stock Unit Agreement [removed: – deferral] [added: (deferral] of receipt of [removed: shares] [added: shares)] (2018). Filed as Exhibit 10.26 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/1393311/000139331119000004/psa-20181231xex10_26.htm) | | |

| [removed: 10.18*] [added: 10.15*] | | | [Form of 2016 Plan Trustee Deferred Stock Unit Agreement (2018). Filed as Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/1393311/000139331119000004/psa-20181231xex10_29.htm) | | |

| [removed: 10.19*] [added: 10.16*] | | | [Form of 2016 Plan Executive Restricted Stock Unit Agreement (2018). Filed as Exhibit 10.30 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/1393311/000139331119000004/psa-20181231xex10_30.htm) | | |

| [removed: 10.20*] [added: 10.17*] | | | [Form of 2016 Employee Stock Unit Agreement (2020). Filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1393311/000156276220000160/psa-20200331xex10_2.htm) | | |

| [removed: 10.21*] [added: 10.18*] | | | [Form of 2016 Plan Employee Non-Qualified Stock Option Agreement (2020). Filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1393311/000156276220000160/psa-20200331xex10_4.htm) | | |

| [removed: 10.22*] [added: 10.19*] | | | [Form of 2016 Plan Performance-Based Non-Qualified Stock Option Agreement (2020). Filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1393311/000156276220000160/psa-20200331xex10_5.htm) | | |

| [removed: 10.23*] [added: 10.20*] | | | [Form of 2021 Plan Employee Stock Unit [removed: Agreement.] [added: Agreement (2021).] Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1393311/000156276221000287/psa-20210630xex10_1.htm) | | |

| [removed: 10.24*] [added: 10.22*] | | | [Form of 2021 Plan [removed: Employee] [added: Trustee] Non-Qualified Stock Option Agreement. Filed as Exhibit [removed: 10.2] [added: 10.1] to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, [removed: 2021] [added: 2022] and incorporated herein by [removed: reference.](https://www.sec.gov/Archives/edgar/data/1393311/000156276221000287/psa-20210630xex10_2.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/1393311/000139331122000029/psa-63022xex10_1formoftrus.htm)] | | |

| 10.6* | | | [Public Storage 2016 Equity and Performance-Based Incentive Compensation Plan (2016 Plan). Filed herewith.](https://www.sec.gov/Archives/edgar/data/1393311/000139331123000012/psa-123122xex10_62016plan.htm) | | |

| 10.7* | | | [Public Storage 2021 Equity and Performance-Based Incentive Compensation Plan (2021 Plan). Filed herewith.](https://www.sec.gov/Archives/edgar/data/1393311/000139331123000012/psa-123122xex10_72021plan.htm) | | |

| 10.21* | | | [Form of 2021 Plan Employee Stock Unit Agreement (2022). Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/1393311/000139331122000018/exhibit101-2022psaformofem.htm) | | |

| 10.24* | | | [Form of 2021 Plan Performance-Based Stock Unit Agreement (2022). Filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/1393311/000139331122000029/psa-63022xex10_3formofperf.htm) | | |

| [Notes to](#idcbceb955cc148bc8844018cabe9b51f_31) consolidated [financial statements](#idcbceb955cc148bc8844018cabe9b51f_31) | | | [F-](#idcbceb955cc148bc8844018cabe9b51f_31)[10](#idcbceb955cc148bc8844018cabe9b51f_31) - F-31 | | |

February 21, 2023

| Cash and equivalents | | | $ | 775,253 | | | | | $ | 734,599 | |

| | | | 24,219,126 | | | | | | 22,807,833 | | |

| | | | 15,664,971 | | | | | | 15,034,525 | | |

| | | | 16,037,963 | | | | | | 15,306,996 | | |

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

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

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

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

| Gain on sale of equity investment in PS Business Parks, Inc. | | | | | | | | | | | | | | | 2,128,860 | | | | | | — | | | | | | — | | |

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

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

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

| | | | | | | | | | | | | | | | For the Years Ended December 31, | | | | | | | | | | | | | | |

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

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

| Allocation to noncontrolling interests | | | | | | | | | | | | | | | (17,127) | | | | | | (6,376) | | | | | | (4,014) | | |

| Issuance of 10,000 preferred shares (Note 9) | | | 250,000 | | | | | | — | | | | | | (7,168) | | | | | | — | | | | | | — | | | | | | 242,832 | | | | | | — | | | | | | 242,832 | | | | | | — | | |

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

| Retirement of common shares (151,977 shares) | | | — | | | | | | (15) | | | | | | 15 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| Taxes paid upon net share settlement of restricted share units | | | — | | | | | | — | | | | | | (16,827) | | | | | | — | | | | | | — | | | | | | (16,827) | | | | | | — | | | | | | (16,827) | | | | | | — | | |

| Share-based compensation expense (Note 11) | | | — | | | | | | — | | | | | | 63,360 | | | | | | — | | | | | | — | | | | | | 63,360 | | | | | | — | | | | | | 63,360 | | | | | | — | | |

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

| Reclassification from redeemable noncontrolling interests to noncontrolling interests | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 83,826 | | | | | | 83,826 | | | | | | (83,826) | | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | 4,366,274 | | | | | | — | | | | | | 4,366,274 | | | | | | — | | | | | | 4,366,274 | | | | | | — | | |

| Balances at December 31, 2022 | | | $ | 4,350,000 | | | | | $ | 17,527 | | | | | $ | 5,896,423 | | | | | $ | (110,231) | | | | | $ | (80,317) | | | | | $ | 10,073,402 | | | | | $ | 93,399 | | | | | $ | 10,166,801 | | | | | $ | — | |

| Net income | | | $ | 4,366,274 | | | | | $ | 1,959,639 | | | | | $ | 1,361,227 | |

| Gain on sale of equity investment in PS Business Parks, Inc. | | | (2,128,860) | | | | | | — | | | | | | — | | |

| Unrealized foreign currency exchange (gain) loss | | | (97,563) | | | | | | (111,787) | | | | | | 97,953 | | |

| Proceeds from sale of equity investment in PS Business Parks, Inc. | | | 2,636,011 | | | | | | — | | | | | | — | | |

| | | | $ | 805,157 | | | | | $ | 761,290 | | | | | $ | 282,600 | |

December 31, 2022

On July 20, 2022, in connection with the closing of the merger of PS Business Parks, Inc. (“PSB”) with affiliates of Blackstone Real Estate (“Blackstone”), we completed the sale of our 41% common equity interest in PSB in its entirety.

Refer to Note 4.

Investments in Unconsolidated Real Estate Entities for transaction information and our accounting treatment of the sale.

| | | | | | |

| 10.1 | | | [Agreement of Limited Partnership of PS Business Parks, L.P. Filed with PS Business Parks, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1998 (SEC File No. 001-10709) and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/866368/0000866368-98-000024.txt) | | |

| 10.2 | | | [Amended and Restated Agreement of Limited Partnership of Storage Trust Properties, L.P. (March 12, 1999). Filed with PSI’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1999 (SEC File No. 001-0839) and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/318380/000031838099000018/0000318380-99-000018.txt) | | |

| 10.12* | | | [Public Storage 2016 Equity and Performance-Based Incentive Compensation Plan. Filed as Appendix A to the Company’s 2016 Proxy Statement dated March 16, 2016 and incorporated herein by reference](http://www.sec.gov/Archives/edgar/data/1393311/000119312516506122/d126315ddef14a.htm). | | |

| 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) | | |

| 10.16 | | | [Amendment to Amended Agreement of Limited Partnership of PS Business Parks, L.P. to Authorize Special Allocations, dated as of January 1, 2017. Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018 (SEC File No. 001-33519) and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/1393311/000139331118000009/psa-20180331xex10_1.htm) | | |

February 22, 2022

| | | | 15,034,525 | | | | | | 10,220,492 | | |

| | | | 15,306,996 | | | | | | 10,408,571 | | |

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

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

| Balances at December 31, 2018 | | | $ | 4,025,000 | | | | | $ | 17,413 | | | | | $ | 5,718,485 | | | | | $ | (577,360) | | | | | $ | (64,060) | | | | | $ | 9,119,478 | | | | | $ | 25,250 | | | | | $ | 9,144,728 | | | | | $ | — | |

| Issuance of 43,600 preferred shares (Note 9) | | | 1,090,000 | | | | | | — | | | | | | (30,844) | | | | | | — | | | | | | — | | | | | | 1,059,156 | | | | | | — | | | | | | 1,059,156 | | | | | | — | | |

| Share-based compensation expense, net of cash paid in lieu of common shares (Note 11) | | | — | | | | | | — | | | | | | 13,671 | | | | | | — | | | | | | — | | | | | | 13,671 | | | | | | — | | | | | | 13,671 | | | | | | — | | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | 1,525,651 | | | | | | — | | | | | | 1,525,651 | | | | | | — | | | | | | 1,525,651 | | | | | | — | | |

| Redemption of preferred shares | | | (1,175,000) | | | | | | (1,220,000) | | | | | | (1,050,000) | | |

| Acquisition of noncontrolling interests | | | (692) | | | | | | (33) | | | | | | (35,000) | | |

| Cash and equivalents | | | $ | 257,560 | | | | | $ | 409,743 | | | | | $ | 361,218 | |

| | | | $ | 282,600 | | | | | $ | 433,554 | | | | | $ | 384,019 | |

| Preferred shares called for redemption and reclassified to liabilities | | | — | | | | | | 300,000 | | | | | | — | | |

Promotional discounts

| Beginning balance | | | $ | 17,372,627 | | | | | $ | 16,289,146 | | | | | $ | 15,296,844 | |

space.

The limited partnership units are convertible at our option, subject to certain conditions, on a one-for-one basis into PSB common stock.

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

Based upon the closing price at December 31, 2021 (€57.50 per share of Shurgard common stock, at 1.134 exchange rate of US Dollars to the Euro), the shares we owned had a market value of approximately $2.0 billion.

During 2021, 2020, and 2019, we received cash dividend distribution from Shurgard totaling $41.5 million, $34.9 million and $23.1 million, respectively.

| 2022 | | | | | | $ | 86,759 | |

| 2023 | | | | | | 24,417 | | |

| Thereafter | | | | | | 7,051 | | |

| Total | | | | | | $ | 118,227 | |

| | | | December 31, 2020 | | | | | | | | |

| Notes due September 15, 2022 | | | $ | 499,109 | | | | | $ | 517,419 | |

| Notes due September 15, 2027 | | | 496,452 | | | | | | 560,833 | | |

| Notes due May 1, 2029 | | | 497,433 | | | | | | 574,833 | | |

| | | | 1,492,994 | | | | | | 1,653,085 | | |

| Notes due April 12, 2024 | | | 122,646 | | | | | | 129,192 | | |

| Notes due November 3, 2025 | | | 296,821 | | | | | | 323,552 | | |

| Notes due January 24, 2032 | | | 607,301 | | | | | | 634,389 | | |

| | | | 1,026,768 | | | | | | 1,087,133 | | |