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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2023
or
☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ____________ to ____________.
Commission File Number: 001-33519
Public Storage
(Exact name of registrant as specified in its charter)
Maryland95-3551121
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification Number)
  
701 Western Avenue, Glendale, California
91201-2349
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (818) 244-8080.
Former name, former address and former fiscal, if changed since last report: N/A
Securities registered pursuant to Section 12b of the Act:
Title of ClassTrading SymbolName of each exchange on which registered
Common Shares, $0.10 par valuePSANew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 5.150% Cum Pref Share, Series F, $0.01 par valuePSAPrFNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 5.050% Cum Pref Share, Series G, $0.01 par valuePSAPrGNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 5.600% Cum Pref Share, Series H, $0.01 par valuePSAPrHNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.875% Cum Pref Share, Series I, $0.01 par valuePSAPrINew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.700% Cum Pref Share, Series J, $0.01 par valuePSAPrJNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.750% Cum Pref Share, Series K, $0.01 par valuePSAPrKNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.625% Cum Pref Share, Series L, $0.01 par valuePSAPrLNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.125% Cum Pref Share, Series M, $0.01 par valuePSAPrMNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 3.875% Cum Pref Share, Series N, $0.01 par valuePSAPrNNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 3.900% Cum Pref Share, Series O, $0.01 par valuePSAPrONew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.000% Cum Pref Share, Series P, $0.01 par valuePSAPrPNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 3.950% Cum Pref Share, Series Q, $0.01 par valuePSAPrQNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.000% Cum Pref Share, Series R, $0.01 par valuePSAPrRNew York Stock Exchange
Depositary Shares Each Representing 1/1,000 of a 4.100% Cum Pref Share, Series S, $0.01 par valuePSAPrSNew York Stock Exchange
0.875% Senior Notes due 2032PSA32New York Stock Exchange
0.500% Senior Notes due 2030PSA30New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.
☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated
filer		Non-accelerated filerSmaller reporting companyEmerging growth company
☒☐☐☐☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes ☒ No
Indicate the number of the registrant’s outstanding common shares of beneficial interest, as of July 28, 2023:
Common Shares of beneficial interest, $0.10 par value per share – 175,829,466 shares


PUBLIC STORAGE
INDEX
PART IFINANCIAL INFORMATIONPages
Item 1.Consolidated Financial Statements (Unaudited) 
 Consolidated Balance Sheets
 Consolidated Statements of Income
 Consolidated Statements of Comprehensive Income
 Consolidated Statements of Equity and Redeemable Noncontrolling Interests
4-7
 Consolidated Statements of Cash Flows
8-9
 Condensed Notes to Consolidated Financial Statements
10-23
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
24-52
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 4.Controls and Procedures
PART II
OTHER INFORMATION (Items 3, 4 and 5 are not applicable)
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.Exhibits




PUBLIC STORAGE
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)

 June 30,
2023		December 31,
2022
(Unaudited)
ASSETS  
    
Cash and equivalents$651,665 $775,253 
Real estate facilities, at cost:
Land5,315,098 5,273,073 
Buildings19,365,416 18,946,053 
24,680,514 24,219,126 
Accumulated depreciation (8,966,878)(8,554,155)
15,713,636 15,664,971 
Construction in process449,931 372,992 
16,163,567 16,037,963 
Investments in unconsolidated real estate entities276,778 275,752 
Goodwill and other intangible assets, net212,022 232,517 
Other assets256,294 230,822 
Total assets $17,560,326 $17,552,307 
     
LIABILITIES AND EQUITY    
    
Notes payable$6,894,167 $6,870,826 
Accrued and other liabilities507,588 514,680 
Total liabilities7,401,755 7,385,506 
    
Commitments and contingencies (Note 14)
  
  
Equity:    
Public Storage shareholders’ equity:    
Preferred Shares, $0.01 par value, 100,000,000 shares authorized, 174,000 shares issued (in series) and outstanding, (174,000 at December 31, 2022) at liquidation preference
4,350,000 4,350,000 
Common Shares, $0.10 par value, 650,000,000 shares authorized, 175,492,886 shares issued and outstanding (175,265,668 shares at December 31, 2022)
17,549 17,527 
Paid-in capital 5,940,945 5,896,423 
Accumulated deficit (167,404)(110,231)
Accumulated other comprehensive loss(75,146)(80,317)
Total Public Storage shareholders’ equity 10,065,944 10,073,402 
Noncontrolling interests92,627 93,399 
Total equity10,158,571 10,166,801 
Total liabilities and equity$17,560,326 $17,552,307 

See accompanying notes.
1

PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share amounts)
(Unaudited)


 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Revenues:
Self-storage facilities $1,056,120 $973,286 $2,088,304 $1,890,301 
Ancillary operations 63,650 58,759 125,698 115,189 
1,119,770 1,032,045 2,214,002 2,005,490 
Expenses:
Self-storage cost of operations 257,678 237,989 526,293 483,483 
Ancillary cost of operations 22,202 17,210 41,878 32,725 
Depreciation and amortization 222,133 218,708 443,783 440,836 
General and administrative 25,434 28,831 50,978 51,900 
Interest expense 38,079 32,941 74,180 66,065 
 565,526 535,679 1,137,112 1,075,009 
Other increases (decreases) to net income:
Interest and other income 18,452 10,279 37,086 13,658 
Equity in earnings of unconsolidated real estate entities 9,565 48,525 15,560 91,949 
Foreign currency exchange (loss) gain(1,096)101,723 (27,956)137,100 
Net income 581,165 656,893 1,101,580 1,173,188 
Allocation to noncontrolling interests (3,136)(3,043)(5,843)(5,395)
Net income allocable to Public Storage shareholders 578,029 653,850 1,095,737 1,167,793 
Allocation of net income to:
Preferred shareholders(48,673)(48,673)(97,351)(97,038)
Restricted share units (1,097)(1,796)(2,539)(3,250)
Net income allocable to common shareholders$528,259 $603,381 $995,847 $1,067,505 
Net income per common share:
Basic$3.01 $3.44 $5.68 $6.09 
Diluted$3.00 $3.42 $5.65 $6.05 
Basic weighted average common shares outstanding 175,484175,229175,428175,200
Diluted weighted average common shares outstanding176,212176,312176,181176,325

See accompanying notes.
2

PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
(Unaudited)

 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Net income $581,165 $656,893 $1,101,580 $1,173,188 
Foreign currency translation gain (loss) on investment in Shurgard1,302 (18,835)5,171 (25,630)
Total comprehensive income 582,467 638,058 1,106,751 1,147,558 
Allocation to noncontrolling interests (3,136)(3,043)(5,843)(5,395)
Comprehensive income allocable to Public Storage shareholders$579,331 $635,015 $1,100,908 $1,142,163 

See accompanying notes.
3

PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
Three Months Ended June 30, 2023
(Amounts in thousands, except share and per share amounts)
(Unaudited)

 Cumulative Preferred SharesCommon SharesPaid-in CapitalAccumulated DeficitAccumulated
Other Comprehensive Loss		Total
Public Storage Shareholders' Equity		Noncontrolling InterestsTotal Equity
Balances at March 31, 2023
$4,350,000 $17,547 $5,923,564 $(168,952)$(76,448)$10,045,711 $92,337 $10,138,048 
Issuance of common shares in connection with share-based compensation (26,664 shares)
— 2 5,003 — — 5,005 — 5,005 
Taxes withheld upon net share settlement of restricted share units— — (464)— — (464)— (464)
Share-based compensation expense— — 12,842 — — 12,842 — 12,842 
Contributions by noncontrolling interests— — — — — — 729 729 
Net income — — — 581,165 — 581,165 — 581,165 
Net income allocated to noncontrolling interests — — — (3,136)— (3,136)3,136 — 
Distributions to:
Preferred shareholders (Note 9) — — — (48,673)— (48,673)— (48,673)
Noncontrolling interests — — — — — — (3,575)(3,575)
Common shareholders and restricted share unitholders ($3.00 per share) (Note 9)
— — — (527,808)— (527,808)— (527,808)
Other comprehensive income— — — — 1,302 1,302 — 1,302 
Balances at June 30, 2023
$4,350,000 $17,549 $5,940,945 $(167,404)$(75,146)$10,065,944 $92,627 $10,158,571 

See accompanying notes.
4

PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
Three Months Ended June 30, 2022
(Amounts in thousands, except share and per share amounts)
(Unaudited)

 Cumulative Preferred SharesCommon SharesPaid-in CapitalAccumulated DeficitAccumulated
Other Comprehensive Loss		Total
Public Storage Shareholders' Equity		Noncontrolling InterestsTotal EquityRedeemable Noncontrolling Interests
Balances at March 31, 2022
$4,350,000 $17,521 $5,827,674 $(436,101)$(60,382)$9,698,712 $20,549 $9,719,261 $83,826 
Issuance of common shares in connection with share-based compensation (26,824 shares)
— 3 3,450 — — 3,453 — 3,453 — 
Taxes withheld upon net share settlement of restricted share units— — (1,636)— — (1,636)— (1,636)— 
Share-based compensation expense— — 19,144 — — 19,144 — 19,144 — 
Contributions by noncontrolling interests— — — — — — 5,346 5,346 — 
Reclassification from redeemable noncontrolling interests to noncontrolling interests— — — — — — 83,826 83,826 (83,826)
Net income — — — 656,893 — 656,893 — 656,893 — 
Net income allocated to noncontrolling interests — — — (3,043)— (3,043)3,043 — — 
Distributions to:
Preferred shareholders— — — (48,673)— (48,673)— (48,673)— 
Noncontrolling interests — — — — — — (19,142)(19,142)— 
Common shareholders and restricted share unitholders ($2.00 per share)
— — — (351,289)— (351,289)— (351,289)— 
Other comprehensive loss— — — — (18,835)(18,835)— (18,835)— 
Balances at June 30, 2022
$4,350,000 $17,524 $5,848,632 $(182,213)$(79,217)$9,954,726 $93,622 $10,048,348 $— 

See accompanying notes.
5

PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
Six Months Ended June 30, 2023
(Amounts in thousands, except share and per share amounts)
(Unaudited)
 Cumulative Preferred SharesCommon SharesPaid-in CapitalAccumulated DeficitAccumulated
Other Comprehensive Loss		Total
Public Storage Shareholders' Equity		Noncontrolling InterestsTotal Equity
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 
Issuance of common shares in connection with share-based compensation (227,218 shares) (Note 11)
— 22 30,162 — — 30,184 — 30,184 
Taxes withheld upon net share settlement of restricted share units (Note 11)— — (9,396)— — (9,396)— (9,396)
Share-based compensation cost (Note 11)— — 23,756 — — 23,756 — 23,756 
Contributions by noncontrolling interests— — — — — — 733 733 
Net income — — — 1,101,580 — 1,101,580 — 1,101,580 
Net income allocated to noncontrolling interests — — — (5,843)— (5,843)5,843 — 
Distributions to:
Preferred shareholders (Note 9)— — — (97,351)— (97,351)— (97,351)
Noncontrolling interests — — — — — — (7,348)(7,348)
Common shareholders and restricted share unitholders ($6.00 per share) (Note 9)
— — — (1,055,559)— (1,055,559)— (1,055,559)
Other comprehensive income— — — — 5,171 5,171 — 5,171 
Balances at June 30, 2023
$4,350,000 $17,549 $5,940,945 $(167,404)$(75,146)$10,065,944 $92,627 $10,158,571 
See accompanying notes.
6

PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
Six Months Ended June 30, 2022
(Amounts in thousands, except share and per share amounts)
(Unaudited)

 Cumulative Preferred SharesCommon SharesPaid-in CapitalAccumulated DeficitAccumulated
Other Comprehensive Loss		Total
Public Storage Shareholders' Equity		Noncontrolling InterestsTotal EquityRedeemable Noncontrolling Interests
Balances at December 31, 2021
$4,100,000 $17,513 $5,821,667 $(550,416)$(53,587)$9,335,177 $20,112 $9,355,289 $68,249 
Issuance of 10,000 preferred shares
250,000 — (7,168)— — 242,832 — 242,832 — 
Issuance of common shares in connection with share-based compensation (104,808 shares)
— 11 11,549 — — 11,560 — 11,560 — 
Taxes withheld upon net settlement of restricted share units— — (12,210)— — (12,210)— (12,210)— 
Share-based compensation cost
— — 34,794 — — 34,794 — 34,794 — 
Contributions by noncontrolling interests— — — — — — 6,137 6,137 15,426 
Reclassification from redeemable noncontrolling interests to noncontrolling interests— — — — — — 83,826 83,826 (83,826)
Net income — — — 1,173,188 — 1,173,188 — 1,173,188 — 
Net income allocated to noncontrolling interests — — — (5,395)— (5,395)4,735 (660)660 
Distributions to:
Preferred shareholders— — — (97,038)— (97,038)— (97,038)— 
Noncontrolling interests — — — — — — (21,188)(21,188)(509)
Common shareholders and restricted share unitholders ($4.00 per share)
— — — (702,552)— (702,552)— (702,552)— 
Other comprehensive loss— — — — (25,630)(25,630)— (25,630)— 
Balances at June 30, 2022
$4,350,000 $17,524 $5,848,632 $(182,213)$(79,217)$9,954,726 $93,622 $10,048,348 $— 

See accompanying notes.
7

PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

 For the Six Months Ended June 30,
 20232022
Cash flows from operating activities:    
Net income $1,101,580 $1,173,188 
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization443,783 440,836 
Equity in earnings of unconsolidated real estate entities(15,560)(91,949)
Distributions from cumulative equity in earnings of unconsolidated real estate entities17,329 46,593 
Unrealized foreign currency exchange loss (gain)27,845 (136,818)
Share-based compensation expense21,794 30,856 
Other6,658 3,970 
Changes in operating assets and liabilities:
Other assets(19,419)(6,198)
Accrued and other liabilities (4,717)(6,705)
Net cash flows from operating activities 1,579,293 1,453,773 
Cash flows from investing activities:
Capital expenditures to maintain real estate facilities(105,056)(104,836)
Capital expenditures for property enhancements(67,319)(83,329)
Capital expenditures for energy efficiencies (LED lighting, solar)(25,850)(24,308)
Development and expansion of real estate facilities(161,435)(156,463)
Acquisition of real estate facilities and intangible assets(190,778)(231,417)
Distributions in excess of cumulative equity in earnings from unconsolidated real estate entities3,165 4,537 
Net cash flows used in investing activities (547,273)(595,816)
Cash flows from financing activities:
Issuance costs on amendment of credit facility(8,377)— 
Repayments on notes payable(8,200)(472)
Issuance of preferred shares — 242,832 
Issuance of common shares in connection with share-based compensation30,057 11,492 
Taxes paid upon net share settlement of restricted share units(9,396)(12,210)
Contributions by noncontrolling interests 733 1,698 
Distributions paid to preferred shareholders, common shareholders and restricted share unitholders(1,152,555)(799,502)
Distributions paid to noncontrolling interests (7,348)(21,697)
Net cash flows used in financing activities (1,155,086)(577,859)
Net (decrease) increase in cash and equivalents, including restricted cash $(123,066)$280,098 
See accompanying notes.
8

PUBLIC STORAGE
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)

 For the Six Months Ended June 30,
 20232022
Cash and equivalents, including restricted cash at beginning of the period:
Cash and equivalents $775,253 $734,599 
Restricted cash included in other assets29,904 26,691 
$805,157 $761,290 
Cash and equivalents, including restricted cash at end of the period:
Cash and equivalents $651,665 $1,013,886 
Restricted cash included in other assets30,426 27,502 
 $682,091 $1,041,388 
Supplemental schedule of non-cash investing and financing activities:
Costs incurred during the period remaining unpaid at period end for:
Capital expenditures to maintain real estate facilities$(6,405)$(7,706)
Capital expenditures for property enhancements(3,446)(6,268)
Capital expenditures for energy efficiencies (LED lighting, solar)(1,177)(1,822)
Construction or expansion of real estate facilities(57,850)(48,682)
Real estate acquired in exchange for noncontrolling interests— (19,865)

See accompanying notes.
9

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Unaudited)

1.Description of the Business
Public Storage (referred to herein as “the Company,” “we,” “us,” or “our”), a Maryland 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 ownership and operation of self-storage facilities that offer storage spaces for lease, generally on a month-to-month basis, for personal and business use, ancillary activities such as tenant reinsurance, merchandise sales, and third party management, as well as the acquisition and development of additional self-storage space.
At June 30, 2023, we had direct and indirect equity interests in 2,888 self-storage facilities (with approximately 206.0 million net rentable square feet) located in 40 states in the United States (“U.S.”) operating under the Public Storage® name, and 1.2 million net rentable square feet of commercial and retail space.
At June 30, 2023, we owned a 35% common equity interest in Shurgard Self Storage Limited (“Shurgard”), a public company traded on the Euronext Brussels under the “SHUR” symbol, which owned 266 self-storage facilities (with approximately 15 million net rentable square feet) located in seven Western European countries, all operating under the Shurgard® name.
2.Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
We have prepared the accompanying interim consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) as set forth in the Accounting Standards Codification of the Financial Accounting Standards Board (“FASB”), and in conformity with the rules and regulations of the Securities and Exchange Commission (“SEC”). In our opinion, the interim consolidated financial statements presented herein reflect all adjustments, primarily of a normal recurring nature, that are necessary to present fairly the interim consolidated financial statements. Because they do not include all of the disclosures required by GAAP for complete annual financial statements, these interim consolidated financial statements should be read together with the audited Consolidated Financial Statements and related Notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Certain amounts previously reported in our June 30, 2022 Statements of Cash Flows have been reclassified to conform to the June 30, 2023 presentation, with respect to the separate presentation of changes in operating assets and liabilities in the cash flows from operating activities section and major types of capital expenditures in the cash flows from investing activities section. The reclassifications did not affect the subtotals for cash flows from operating, investing or financing activities.
Disclosures of the number and square footage of facilities, as well as the number and coverage of tenant reinsurance policies (Note 14) are unaudited and outside the scope of our independent registered public accounting firm’s review of our financial statements in accordance with the standards of the Public Company Accounting Oversight Board (U.S.).
Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.
Summary of Significant Accounting Policies
There have been no significant changes to the Company's significant accounting policies described in Note 2, Basis of Presentation and Summary of Significant Accounting Policies, in Notes to Consolidated Financial Statements included in Item 8 of Part II of the Company's Annual Report on Form 10-K for the year ended December 31, 2022.
10

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Unaudited)
3.Real Estate Facilities

Activity in real estate facilities during the six months ended June 30, 2023 is as follows:
Six Months Ended June 30, 2023
 (Amounts in thousands)
Operating facilities, at cost:
Beginning balance $24,219,126 
Capital expenditures to maintain real estate facilities96,352 
Capital expenditures for property enhancements70,986 
Capital expenditures for energy efficiencies (LED lighting, solar)27,206 
Acquisitions 185,903 
Dispositions and other(3,448)
Developed or expanded facilities opened for operation84,389 
Ending balance 24,680,514 
Accumulated depreciation:
Beginning balance (8,554,155)
Depreciation expense (415,358)
Dispositions and other2,635 
Ending balance (8,966,878)
Construction in process:
Beginning balance 372,992 
Costs incurred to develop and expand real estate facilities163,670 
Write-off of cancelled projects(2,342)
Developed or expanded facilities opened for operation(84,389)
Ending balance 449,931 
Total real estate facilities at June 30, 2023
$16,163,567 
During the six months ended June 30, 2023, we acquired 16 self-storage facilities (1.2 million net rentable square feet of storage space), for a total cost of $190.8 million in cash. Approximately $4.9 million of the total cost was allocated to intangible assets. We completed development and redevelopment activities costing $84.4 million during the six months ended June 30, 2023, adding 0.6 million net rentable square feet of self-storage space. Construction in process at June 30, 2023 consisted of projects to develop new self-storage facilities and expand existing self-storage facilities.

11

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Unaudited)
4.Investments in Unconsolidated Real Estate Entities
The following tables set forth our investments in, and equity in earnings of, the Unconsolidated Real Estate Entities (amounts in thousands):
 Investments in Unconsolidated Real Estate Entities at
June 30, 2023December 31, 2022
Shurgard$276,778$275,752
Equity in Earnings of Unconsolidated Real Estate Entities for the
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
PSB $—$40,124$—$77,010
Shurgard9,5658,40115,56014,939
Total $9,565$48,525$15,560$91,949
Investment in PSB
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. 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 during the third quarter of 2022.
During the six months ended June 30, 2022, we received cash distributions from PSB totaling $30.4 million. Since the sale of PSB in July 2022, we no longer recognize equity in earnings or receive cash distributions from PSB.
Investment in Shurgard
Throughout all periods presented, we effectively owned, directly and indirectly 31,268,459 Shurgard common shares, representing a 35% equity interest in Shurgard.
Based upon the closing price at June 30, 2023 (€41.83 per share of Shurgard common stock, at 1.089 exchange rate of U.S. Dollars to the Euro), the shares we owned had a market value of approximately $1.4 billion.
Our equity in earnings of Shurgard comprised our equity share of Shurgard’s net income, less amortization of the Shurgard Basis Differential (defined below). During the six months ended June 30, 2023 and 2022, we received $1.9 million and $1.7 million of trademark license fees that Shurgard pays to us for the use of the Shurgard® trademark, respectively. We eliminated $0.7 million and $0.6 million of intra-entity profits and losses for the six months ended June 30, 2023 and 2022, respectively, representing our equity share of the trademark license fees. We classify the remaining license fees we receive from Shurgard as interest and other income on our income statement.
During the six months ended June 30, 2023 and 2022, we received cash dividend distributions from Shurgard totaling $19.8 million and $20.1 million, respectively. Approximately $3.2 million and $4.5 million of total cash distributions from Shurgard during the six months ended June 30, 2023 and 2022, respectively, represented distributions in excess of cumulative equity in earnings from Shurgard, which was classified within cash flows from investing activities in the Consolidated Statements of Cash Flows.
At June 30, 2023, our investment in Shurgard’s real estate assets exceeded our pro-rata share of the underlying amounts on Shurgard’s balance sheet by approximately $64.7 million ($67.8 million at December 31, 2022). This differential (the “Shurgard Basis Differential”) includes our basis adjustments in Shurgard’s real estate assets net of related deferred income taxes. The Shurgard Basis Differential is being amortized as a reduction to equity in earnings of the Unconsolidated Real Estate Entities. Such amortization totaled approximately $3.1 million and $4.1 million during the six months ended June 30, 2023 and 2022, respectively.
12

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Unaudited)
As of June 30, 2023 and 2022, we translated the book value of our investment in Shurgard from Euro to U.S. Dollars and recorded $5.2 million other comprehensive income and $25.6 million other comprehensive loss during the six months ended June 30, 2023 and 2022, respectively.
5.Goodwill and Other Intangible Assets

Goodwill and other intangible assets consisted of the following (amounts in thousands):
At June 30, 2023At December 31, 2022
Gross Book ValueAccumulated AmortizationNet Book ValueGross Book ValueAccumulated AmortizationNet Book Value
Goodwill$165,843 $— $165,843 $165,843 $— $165,843 
Shurgard® Trade Name18,824 — 18,824 18,824 — 18,824 
Finite-lived intangible assets, subject to amortization762,981 (735,626)27,355 758,106 (710,256)47,850 
Total goodwill and other intangible assets$947,648 $(735,626)$212,022 $942,773 $(710,256)$232,517 

Finite-lived intangible assets consist primarily of acquired customers in place. Amortization expense related to intangible assets subject to amortization was $10.8 million and $25.4 million for the three and six months ended June 30, 2023, respectively, and $24.3 million and $58.2 million for the same periods in 2022. During the six months ended June 30, 2023, intangibles increased $4.9 million, in connection with the acquisition of real estate facilities (Note 3).
The estimated future amortization expense for our finite-lived intangible assets at June 30, 2023 is as follows (amounts in thousands):
YearAmount
Remainder of 2023$15,335 
20246,621 
Thereafter5,399 
Total$27,355 
6.Credit Facility
On June 12, 2023, we entered into an amended revolving credit agreement (the “Credit Facility”), which increases our borrowing limit from $500 million to $1.5 billion and extends the maturity date from April 19, 2024 to June 12, 2027. We have the option to further extend the maturity date by up to one additional year with additional extension fees up to 0.125% of the extended commitment amount. Amounts drawn on the Credit Facility bear annual interest at rates ranging from SOFR plus 0.65% to SOFR plus 1.40% depending upon our credit rating (SOFR plus 0.70% at June 30, 2023). We are also required to pay a quarterly facility fee ranging from 0.10% per annum to 0.30% per annum depending upon our credit rating (0.10% per annum at June 30, 2023). At June 30, 2023 and August 2, 2023, we had no outstanding borrowings under this Credit Facility. We had undrawn standby letters of credit, which reduce our borrowing capacity, totaling $16.7 million at June 30, 2023 ($18.6 million at December 31, 2022 under the previous credit facility). The Credit Facility has various customary restrictive covenants with which we were in compliance at June 30, 2023. We incurred a total of $8.4 million of issuance costs associated with the amended Credit Facility, which is classified as Other Assets on the Consolidated Balance Sheets and will be amortized as Interest Expense on the Consolidated Statement of Income through June 12, 2027.
13

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Unaudited)
7.Notes Payable
Our notes payable are reflected net of issuance costs (including original issue discounts), which are amortized as interest expense on the effective interest method over the term of each respective note. Our notes payable at June 30, 2023 and December 31, 2022 are set forth in the tables below:
   
Amounts at June 30, 2023
 Coupon RateEffective Rate PrincipalUnamortized CostsBook
 Value		Fair
 Value
   ($ amounts in thousands)
U.S. Dollar Denominated Unsecured Debt
Notes due April 23, 2024
SOFR+0.47%
5.519%$700,000 $(573)$699,427 $699,210 
Notes due February 15, 2026
0.875%1.030%500,000 (1,951)498,049 448,134 
Notes due November 9, 20261.500%1.640%650,000 (2,922)647,078 582,127 
Notes due September 15, 2027
3.094%3.218%500,000 (2,228)497,772 466,373 
Notes due May 1, 2028
1.850%1.962%650,000 (3,260)646,740 564,513 
Notes due November 9, 20281.950%2.044%550,000 (2,578)547,422 471,981 
Notes due May 1, 2029
3.385%3.459%500,000 (1,792)498,208 461,929 
Notes due May 1, 2031
2.300%2.419%650,000 (5,355)644,645 541,477 
Notes due November 9, 20312.250%2.322%550,000 (2,957)547,043 451,002 
 5,250,000 (23,616)5,226,384 4,686,746 
Euro Denominated Unsecured Debt
Notes due April 12, 2024
1.540%1.540%108,853 — 108,853 106,422 
Notes due November 3, 2025
2.175%2.175%263,440 — 263,440 249,402 
Notes due September 9, 20300.500%0.640%761,973 (8,051)753,922 588,775 
Notes due January 24, 2032
0.875%0.978%544,266 (4,590)539,676 408,797 
   1,678,532 (12,641)1,665,891 1,353,396 
 Mortgage Debt, secured by 2 real estate facilities with a net book value of $11.8 million
4.428%4.428%1,892 — 1,892 1,710 
 $6,930,424 $(36,257)$6,894,167 $6,041,852 
14

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Unaudited)
Amounts at
 December 31, 2022
 Book ValueFair Value
 ($ amounts in thousands)
U.S. Dollar Denominated Unsecured Debt
Notes due April 23, 2024699,075 691,309 
Notes due February 15, 2026497,678 441,849 
Notes due November 9, 2026646,643 578,899 
Notes due September 15, 2027497,508 466,029 
Notes due May 1, 2028646,401 558,197 
Notes due November 9, 2028547,182 468,509 
Notes due May 1, 2029498,053 456,855 
Notes due May 1, 2031644,303 530,390 
Notes due November 9, 2031546,866 443,514 
 5,223,709 4,635,551 
Euro Denominated Unsecured Debt
Notes due April 12, 2024107,035 104,344 
Notes due November 3, 2025259,039 246,119 
Notes due September 9, 2030740,634 566,204 
Notes due January 24, 2032530,317 396,297 
 1,637,025 1,312,964 
Mortgage Debt10,092 9,568 
 $6,870,826 $5,958,083 
U.S. Dollar Denominated Unsecured Notes
The U.S. Dollar denominated unsecured notes (the “U.S. Dollar Denominated Unsecured Notes”) have various financial covenants with which we were in compliance at June 30, 2023. Included in these covenants are (a) a maximum Debt to Total Assets of 65% (approximately 13% at June 30, 2023) and (b) a minimum ratio of Adjusted EBITDA to Interest Expense of 1.5x (approximately 24x for the twelve months ended June 30, 2023) as well as covenants limiting the amount we can encumber our properties with mortgage debt.
Euro Denominated Unsecured Notes
Our Euro denominated unsecured notes (the “Euro Notes”) consist of four tranches: (i) €242.0 million issued to institutional investors on November 3, 2015, (ii) €100.0 million issued to institutional investors on April 12, 2016, (iii) €500.0 million issued in a public offering on January 24, 2020, and (iv) €700.0 million issued in a public offering on September 9, 2021. The Euro Notes have financial covenants similar to those of the U.S. Dollar Denominated Unsecured Notes.
We reflect changes in the U.S. Dollar equivalent of the amount payable including the associated interest, as a result of changes in foreign exchange rates as “Foreign currency exchange (loss) gain” on our income statement (losses of $1.1 million and $28.2 million for the three and six months ended June 30, 2023, respectively, as compared to gains of $102.9 million and $138.2 million for the three and six months ended June 30, 2022, respectively).
Mortgage Notes
We assumed our non-recourse mortgage debt in connection with property acquisitions, and we recorded such debt at fair value with any premium or discount to the stated note balance amortized using the effective interest method.
15

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Unaudited)
At June 30, 2023, the related contractual interest rates of our mortgage notes are fixed, ranging between 3.9% and 7.1%, and mature between September 1, 2028 and July 1, 2030.
At June 30, 2023, approximate principal maturities of our Notes Payable are as follows (amounts in thousands):
 Unsecured DebtMortgage DebtTotal
Remainder of 2023$—$60$60
2024808,853124808,977
2025263,440131263,571
20261,150,0001381,150,138
2027500,000146500,146
Thereafter 4,206,2391,2934,207,532
$6,928,532$1,892$6,930,424
Weighted average effective rate 2.3%4.4%2.3%
Cash paid for interest totaled $73.7 million and $66.0 million for the six months ended June 30, 2023 and 2022, respectively. Interest capitalized as real estate totaled $3.8 million and $2.6 million for the six months ended June 30, 2023 and 2022, respectively.
8.Noncontrolling Interests
There are noncontrolling interests related to several subsidiaries we consolidate of which we do not own 100% of the equity. At June 30, 2023, certain of these subsidiaries have issued 499,966 partnership units to third-parties that are convertible on a one-for-one basis (subject to certain limitations) into common shares of the Company at the request of the unitholder.
16

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Unaudited)
9.Shareholders’ Equity

Preferred Shares
At June 30, 2023 and December 31, 2022, we had the following series of Cumulative Preferred Shares (“Preferred Shares”) outstanding:

   
At June 30, 2023
At December 31, 2022
SeriesEarliest Redemption DateDividend RateShares OutstandingLiquidation PreferenceShares OutstandingLiquidation Preference
   (Dollar amounts in thousands)
Series F6/2/20225.150 %11,200 $280,000 11,200 $280,000 
Series G8/9/20225.050 %12,000 300,000 12,000 300,000 
Series H3/11/20245.600 %11,400 285,000 11,400 285,000 
Series I9/12/20244.875 %12,650 316,250 12,650 316,250 
Series J11/15/20244.700 %10,350 258,750 10,350 258,750 
Series K12/20/20244.750 %9,200 230,000 9,200 230,000 
Series L6/17/20254.625 %22,600 565,000 22,600 565,000 
Series M8/14/20254.125 %9,200 230,000 9,200 230,000 
Series N10/6/20253.875 %11,300 282,500 11,300 282,500 
Series O11/17/20253.900 %6,800 170,000 6,800 170,000 
Series P6/16/20264.000 %24,150 603,750 24,150 603,750 
Series Q8/17/20263.950 %5,750 143,750 5,750 143,750 
Series R11/19/20264.000 %17,400 435,000 17,400 435,000 
Series S1/13/20274.100 %10,000 250,000 10,000 250,000 
Total Preferred Shares174,000 $4,350,000 174,000 $4,350,000 
The holders of our Preferred Shares have general preference rights with respect to liquidation, quarterly distributions, and any accumulated unpaid distributions. Except as noted below, holders of the Preferred Shares do not have voting rights. In the event of a cumulative arrearage equal to six quarterly dividends, holders of all outstanding series of preferred shares (voting as a single class without regard to series) will have the right to elect two additional members to serve on our Board of Trustees (our “Board”) until the arrearage has been cured. At June 30, 2023, there were no dividends in arrears. The affirmative vote of at least 66.67% of the outstanding shares of a series of Preferred Shares is required for any material and adverse amendment to the terms of such series. The affirmative vote of at least 66.67% of the outstanding shares of all of our Preferred Shares, voting as a single class, is required to issue shares ranking senior to our Preferred Shares.
Except under certain conditions relating to the Company’s qualification as a REIT, the Preferred Shares are not redeemable prior to the dates indicated on the table above. On or after the respective dates, each of the series of Preferred Shares is redeemable at our option, in whole or in part, at $25.00 per depositary share, plus accrued and unpaid dividends. Holders of the Preferred Shares cannot require us to redeem such shares.
Upon issuance of our Preferred Shares, we classify the liquidation value as preferred equity on our consolidated balance sheet with any issuance costs recorded as a reduction to Paid-in capital.
Dividends
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. The distribution equates to an annualized increase to the Company’s regular common dividend from $8.00 to $12.00 per share.
17

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Unaudited)
Common share dividends paid, including amounts paid to our restricted share unitholders and deferred share unitholders, totaled $527.6 million ($3.00 per share) and $351.3 million ($2.00 per share) for the three months ended June 30, 2023 and 2022, respectively, and $1.06 billion ($6.00 per share) and $702.5 million ($4.00 per share) for the six months ended June 30, 2023 and 2022, respectively. Preferred share dividends paid totaled $48.7 million for each of the three months ended June 30, 2023 and 2022, and $97.4 million and $97.0 million for the six months ended June 30, 2023 and 2022, respectively.
10.Related Party Transactions
At June 30, 2023, Tamara Hughes Gustavson, a current member of our Board, held less than a 0.1% equity interest in, and is a manager of, a limited liability company that owns 65 self-storage facilities in Canada. Two of Ms. Gustavson’s adult children owned the remaining equity interest in the limited liability company. These facilities operate under the Public Storage® tradename, which we license to the owners of these facilities for use in Canada on a royalty-free, non-exclusive basis. We have no ownership interest in these facilities and we do not own or operate any facilities in Canada. If we chose to acquire or develop our own facilities in Canada, we would have to share the use of the Public Storage® name in Canada. We have a right of first refusal, subject to limitations, to acquire the stock or assets of the corporation engaged in the operation of these facilities if their owners agree to sell them. Our subsidiaries reinsure risks relating to loss of goods stored by customers in these facilities, and have received premium payments of approximately $1.1 million for each of the six months ended June 30, 2023 and 2022.
11.Share-Based Compensation
Under various share-based compensation plans and under terms established or modified by our Board or a committee thereof, we grant equity awards to trustees, officers, and key employees, including non-qualified options to purchase the Company’s common shares, restricted share units (“RSUs”), deferred share units (“DSUs”), and unrestricted common shares issued in lieu of trustee compensation.
We recorded share-based compensation expense associated with our equity awards in the various expense categories in the Consolidated Statements of Income as set forth in the following table. In addition, $0.6 million and $1.3 million share-based compensation cost was capitalized as real estate facilities for the three and six months ended June 30, 2023, respectively, as compared to $1.1 million and $2.1 million for the same periods of 2022, respectively.
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
 (Amounts in thousands)
Self-storage cost of operations$3,428 $4,673 $7,352 $9,537 
Ancillary cost of operations323 221 640 487 
General and administrative8,198 12,034 13,802 20,832 
Total$11,949 $16,928 $21,794 $30,856 

Included in share-based compensation is $1.6 million and $2.1 million during the three and six months ended June 30, 2023, respectively, as compared to $5.3 million and $9.5 million for the same periods in 2022, respectively, in connection with retirement acceleration as discussed in Note 2 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.
As of June 30, 2023, there was $89.5 million of total unrecognized compensation cost related to share-based compensation arrangements. This cost is expected to be recognized over a weighted-average period of three years.
18

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Unaudited)
Stock Options
We have service-based and performance-based stock options outstanding. Performance-based stock options outstanding vest upon meeting certain performance conditions or market conditions. Stock options generally vest over 3 to 5 years, expire 10 years after the grant date, and have an exercise price equal to the closing trading price of our common shares on the grant date. New shares are issued for options exercised. Employees cannot require the Company to settle their awards in cash.
During the six months ended June 30, 2023, 177,168 stock options were granted, 174,569 options were exercised, and 41,307 options were forfeited. A total of 3,125,775 stock options were outstanding at June 30, 2023 (3,164,483 at December 31, 2022).
During the six months ended June 30, 2023, we granted 60,000 stock options in connection with non-management trustee compensation. For the remaining 117,168 stock options granted during the six months ended June 30, 2023, vesting is dependent upon meeting certain market conditions over the three-year period from March 15, 2023 through March 14, 2026, with continued service-based vesting through the first quarter of 2028. These stock options require relative achievement of the Company’s total shareholder return as compared to the weighted average total shareholder return of specified peer groups and can result in grantees earning up to 200% of the target options originally granted.
For the three and six months ended June 30, 2023, we incurred share-based compensation cost for outstanding stock options of $4.6 million and $7.8 million, respectively, as compared to $7.7 million and $11.6 million for the same periods in 2022.
Restricted Share Units
We have service-based and performance-based RSUs outstanding, which generally vest over 5 to 8 years from the grant date. Performance-based RSUs outstanding vest upon meeting certain performance conditions or market conditions. Upon vesting, the grantee receives new common shares equal to the number of vested RSUs, less common shares withheld to satisfy the grantee’s statutory tax liabilities arising from the vesting.
During the six months ended June 30, 2023, 38,895 RSUs were granted, 18,193 RSUs were forfeited and 70,848 RSUs vested. The vesting resulted in the issuance of 51,350 common shares. A total of 425,901 RSUs were outstanding at June 30, 2023 (476,047 at December 31, 2022).
Among the 38,895 RSUs granted during the six months ended June 30, 2023, 37,211 RSUs were awarded where vesting is dependent upon meeting certain market conditions over a three-year period from March 15, 2023 through March 14, 2026, with continued service-based vesting through the first quarter of 2028. These RSUs require relative achievement of the Company’s total shareholder return as compared to the weighted average total shareholder return of specified peer groups and can result in grantees earning up to 200% of the target RSUs originally granted.
Also included in the RSUs granted during the six months ended June 30, 2023 are 1,684 service-based RSUs.
For the three and six months ended June 30, 2023, we incurred share-based compensation cost for RSUs of $7.7 million and $14.9 million, respectively, as compared to $10.1 million and $20.9 million for the same periods in 2022.
Trustee Deferral Program
Non-management trustees may elect to receive all or a portion of their cash retainers in cash, unrestricted common shares, or fully-vested DSUs to be settled at a specified future date. Unrestricted common shares and/or DSUs will be granted to the non-management trustee on the last day of each calendar quarter based on the cash retainer earned for that quarter and converted into a number of shares or units based on the applicable closing price of our common shares on such date. During the six months ended June 30, 2023, we granted 1,018 DSUs and 432 unrestricted common shares. During the six months ended June 30, 2023, 867 previously granted DSUs were settled in common shares.
19

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Unaudited)
12. Net Income per Common Share
We allocate net income to (i) noncontrolling interests based upon their contractual rights in the respective subsidiaries or for participating noncontrolling interests based upon their participation in both distributed and undistributed earnings of the Company, (ii) preferred shareholders, for distributions paid or payable, (iii) preferred shareholders, to the extent redemption cost exceeds the related original net issuance proceeds (a “preferred share redemption charge”), and (iv) RSUs, for non-forfeitable dividends paid and adjusted for participation rights in undistributed earnings of the Company.
We calculate basic and diluted net income per common share based upon net income allocable to common shareholders, divided by (i) weighted average common shares for basic net income per common share, and (ii) weighted average common shares adjusted for the impact of dilutive stock options outstanding for diluted net income per common share. Potentially dilutive stock options representing 321,070 common shares were excluded from the computation of diluted earnings per share for the three and six months ended June 30, 2023, as compared to 142,683 common shares for the same periods in 2022, because their effect would have been antidilutive.
The following table reconciles the numerators and denominators of the basic and diluted net income per common shares computation for the three and six months ended June 30, 2023 and 2022, respectively (in thousands, except per share amounts):
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Numerator for basic and dilutive net income per common share – net income allocable to common shareholders$528,259$603,381$995,847$1,067,505
Denominator for basic net income per share - weighted average common shares outstanding175,484175,229175,428175,200
Net effect of dilutive stock options - based on treasury stock method7281,0837531,125
Denominator for dilutive net income per share - weighted average common shares outstanding176,212176,312176,181176,325
Net income per common share:
Basic$3.01$3.44$5.68$6.09
Dilutive$3.00$3.42$5.65$6.05

20

PUBLIC STORAGE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Unaudited)
13.Segment Information
Our operating segments reflect the significant components of our operations where discrete financial information is evaluated separately by our chief operating decision maker.
Self-Storage Operations
The Self-Storage Operations reportable segment reflects the aggregated rental operations from the self-storage facilities we own from (i) Same Store Facilities, (ii) Acquired Facilities, (iii) Developed and Expanded Facilities, and (iv) Other Non-Same Store Facilities. The presentation in the table below sets forth the Net Operating Income (“NOI”) of this reportable segment, as well as the related depreciation expense. For all periods presented, substantially all of our real estate facilities, goodwill and other intangible assets, other assets, and accrued and other liabilities are associated with the Self-Storage Operations reportable segment.
Ancillary Operations
The Ancillary Operations reflects the combined operations of our tenant reinsurance, merchandise sales, and third party property management operating segments.
Presentation of Segment Information
The following table reconciles NOI and net income attributable to our reportable segment to our consolidated net income:
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
 (amounts in thousands)
Self-Storage Operations Reportable Segment
Revenue