Financial Performance - Revenues from Same Store Facilities increased by 6.3% ($51.1 million) for Q2 2023 and 8.0% ($126.5 million) for the first half of 2023 compared to the same periods in 2022[125]. - Net income allocable to common shareholders for Q2 2023 was $528.3 million ($3.00 per diluted share), down from $603.4 million ($3.42 per diluted share) in Q2 2022, a decrease of $75.1 million or 12.4%[133]. - Funds from Operations (FFO) for Q2 2023 was $4.29 per diluted share, a decrease of 6.3% from $4.58 per diluted share in Q2 2022[138]. - Core FFO for the first half of 2023 was $8.24 per diluted share, down 2.0% from $8.41 per diluted share in the same period of 2022[139]. - Total revenues from self-storage operations rose by 8.5% to $1,056,120,000 for the three months ended June 30, 2023, compared to $973,286,000 in 2022[145]. - Total revenues for the first half of 2023 reached $1,711,673,000, representing an 8.0% increase compared to $1,585,210,000 in 2022[173]. - Total revenues for the three months ended June 30, 2023, were $64.705 million, an increase of 15.2% compared to $56.177 million in the same period of 2022[182]. - Net income for the six months ended June 30, 2023, was $58.875 million, up 18.1% from $49.842 million in the prior year[182]. Operational Metrics - Net operating income from Acquired Facilities and Newly Developed and Expanded Facilities increased by 24.1% ($21.8 million) for Q2 2023 and 27.7% ($47.1 million) for the first half of 2023 compared to the same periods in 2022[126]. - Net operating income (NOI) for self-storage operations increased by 8.6% to $798,442,000 for the three months ended June 30, 2023, compared to $735,297,000 in 2022[145]. - Average square foot occupancy decreased to 93.7% for the three months ended June 30, 2023, down 2.1% from 95.7% in 2022[155]. - Average occupancy across Same Store Facilities was 93.7% as of June 30, 2023, down from 95.7% in 2022, indicating a decline of 2.1%[169]. - Average occupancy across all markets was 93.5% in 2023, down from 95.6% in 2022, reflecting a 2.2% decrease[172]. - Average square foot occupancy for the 2021 acquisitions was 85.2% as of June 30, 2023, a decrease of 0.9% from the previous year[174]. - Average occupancy for self-storage facilities was 88.4% for the three months ended June 30, 2023, compared to 91.5% in the same period of 2022[193]. Acquisitions and Developments - The company acquired 322 facilities since the beginning of 2021, totaling 28.0 million net rentable square feet for $6.0 billion[126]. - The company entered into a definitive agreement to acquire BREIT Simply Storage LLC for $2.2 billion, which includes 127 self-storage facilities[129]. - The company completed expansion projects on the ezStorage portfolio, adding 169,000 net rentable square feet at a cost of $26.4 million[177]. - The company plans to add 127 wholly-owned self-storage facilities (9.4 million net rentable square feet) as part of the Simply Acquisition announced on July 24, 2023[179]. - The company has 136 facilities in total, an increase of 11 from 125 in the previous year[183]. - As of June 30, 2023, the company had 25 additional facilities in development, totaling 2.5 million net rentable square feet with an aggregate development cost of approximately $554.0 million[189]. Expenses and Costs - The company experienced a $165.1 million decrease in foreign currency exchange gains for the first half of 2023 compared to the same period in 2022[135]. - Total direct cost of operations increased by 6.7% to $169,999 for the three months ended June 30, 2023, from $159,366 in 2022[162]. - Property tax expense increased by 3.6% and 4.3% for the three and six months ended June 30, 2023, respectively, compared to the same periods in 2022, with an expected growth of 5.3% for the full year 2023 due to higher assessed values[163]. - On-site property manager payroll expense rose by 3.1% and 2.8% for the three and six months ended June 30, 2023, respectively, primarily due to competitive labor conditions, with expectations of inflationary increases in 2023[164]. - Repairs and maintenance expense increased by 7.2% and 10.4% for the three and six months ended June 30, 2023, respectively, influenced by various factors including equipment malfunctions and local supply conditions[165]. - Marketing expense surged by 59.2% and 44.3% for the three and six months ended June 30, 2023, respectively, as the company increased online paid search programs to attract new tenants[166]. - Other direct property costs rose by 5.6% and 8.8% for the three and six months ended June 30, 2023, respectively, mainly due to increased credit card fees associated with higher revenues[167]. Future Outlook - The company expects weaker industry-wide demand for the remainder of 2023, with potential revenue growth rates declining significantly compared to previous years[158]. - The company expects a moderate increase in other direct property costs for the remainder of 2023, primarily driven by rising credit card fees[167]. - The company expects future growth to primarily come from customers of newly acquired and developed facilities, as well as additional tenants at existing unstabilized self-storage facilities[197]. - Annual operating retained cash flow increased from $200 million in previous years to approximately $1 billion in 2022, with an expected retained cash flow of $400 million for 2023[212]. Debt and Financing - The principal outstanding on the company's debt totaled approximately $6.9 billion as of June 30, 2023, with a weighted average effective rate of 2.3%[235]. - The company amended its revolving line of credit, increasing the borrowing limit from $500 million to $1.5 billion, with no outstanding borrowings as of August 2, 2023[215]. - The company plans to refinance $700 million of U.S. Dollar denominated unsecured notes and €100 million of Euro denominated unsecured notes maturing in April 2024[222]. Shareholder Returns - The company declared a quarterly dividend of $3.00 per common share, totaling approximately $526 million, representing a 50% increase from the previous year[227]. - The company has authorized the repurchase of up to 35 million common shares, with a total of 23,721,916 shares repurchased at an aggregate cost of approximately $679.1 million[234].

Financial Data and Key Metrics Changes - The company reported core FFO of $4.08 for the quarter, representing a 16.2% growth over the first quarter of 2022, excluding contributions from PSB [12] - Same-store revenues increased by nearly 10% year-over-year, with a 9.8% increase specifically noted for the same-store pool [4][12] - Same-store cost of operations rose by 5.6%, leading to a total net operating income growth of 11.2% for the same-store pool [13] Business Line Data and Key Metrics Changes - Same-store move-in volume was up nearly 13%, indicating strong performance from existing customers [1][4] - The lease-up performance of recently acquired and developed facilities grew by 29% compared to last year [13] - The non-same store acquisition and development pool now constitutes nearly 25% of the overall portfolio and continues to outperform [1] Market Data and Key Metrics Changes - The transaction market has been relatively quiet, with potential sellers cautious due to macroeconomic conditions, but the company has closed or is under contract to acquire nearly $200 million worth of assets, on track for a $750 million outlook for the year [11][12] - The company noted that move-in volume growth has been favorable, with April being characterized as strong [7][21] Company Strategy and Development Direction - The company is focused on leading the self-storage industry's digital evolution and enhancing its operating model [97] - A development pipeline exceeding $1 billion is being driven to be delivered over the next 24 months, with a focus on growth and value for shareholders [98][6] - The company is well-positioned to capitalize on acquisition opportunities, particularly in off-market transactions, leveraging its reputation as a preferred buyer [3][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current operating environment, noting that the inherent demand in the market is strong and that they are encouraged by performance trends [115][122] - Despite macroeconomic uncertainties, the company has lifted its outlook for the year based on strong first-quarter performance [5][122] - Management acknowledged the challenges in the lending environment but sees potential for lower new supply, which could benefit their positioning [134] Other Important Information - The company has achieved significant milestones in its digital initiatives, including over 60% of customers moving in through eRental and the installation of solar at more than 200 properties [107][108] - The average length of stay for tenants is over 36 months, indicating strong customer retention [81] Q&A Session Summary Question: What trends are being observed in April regarding demand and price sensitivity? - Management noted that April showed strong demand and occupancy growth, with move-in volumes increasing and move-out volumes decreasing [21][115] Question: How does the company view the potential for revenue growth rates in the second half of the year? - Management indicated that while there is a wide range of potential outcomes, the strength observed in the first quarter has led to an increase in revenue guidance for the year [122] Question: What is the company's perspective on the LA market's sustainability? - The LA market has shown strong performance, with good demand and occupancy levels, and management believes there is potential for continued growth [124][125] Question: How is the company adapting its development underwriting processes in the current environment? - Management stated that they are consistently looking to improve underwriting processes and are focused on maintaining a yield on cost of around 8% for new developments [75][134]

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 March 31, 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) | Maryland | 95-3551121 | | --- | - ...

Public Storage (NYSE:PSA) Q4 2022 Results Conference Call February 22, 2023 12:00 PM ET Company Participants Ryan Burke - VP, IR Joe Russell - President and CEO Tom Boyle - SVP, CFO and CIO Conference Call Participants Steve Sakwa - Evercore ISI Michael Goldsmith - UBS Jeff Spector - Bank of America Juan Sanabria - BMO Todd Thomas - KeyBanc Capital Markets Spenser Allaway - Green Street Ki Bin Kim - Truist Ronald Kamdem - Morgan Stanley Smedes Rose - Citi Keegan Carl - Wolfe Research Michael Mueller - JP Mo ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2022. 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) Maryland 95-3551121 (State or other jurisdiction of incorporatio ...

Public Storage (NYSE:PSA) Q3 2022 Results Conference Call November 2, 2022 12:00 PM ET Company Participants Ryan Burke - VP, IR Joe Russell - President and CEO Tom Boyle - CFO Conference Call Participants Michael Goldsmith - UBS Lizzy Doykan - Bank of America Samir Khanal - Evercore Smedes Rose - Citi Ki Bin Kim - Truist Juan Sanabria - BMO Capital Markets Spenser Allaway - Green Street Mike Mueller - JPMorgan Todd Thomas - KeyBanc Capital Ronald Kamden - Morgan Stanley Operator Ladies and gentlemen, thank ...

PART I FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated balance sheets, income statements, and cash flows for the period [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets reached $17.45 billion while total liabilities decreased to $7.33 billion as of September 30, 2022 Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$17,450,920** | **$17,380,908** | | Cash and equivalents | $883,787 | $734,599 | | Real estate facilities, net | $15,835,650 | $15,306,996 | | **Total Liabilities** | **$7,330,163** | **$7,957,370** | | Notes payable | $6,740,451 | $7,475,279 | | **Total Equity** | **$10,120,757** | **$9,355,289** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income surged to $2.78 billion in Q3 2022, driven by a significant gain on the sale of an equity investment - A significant gain of **$2.13 billion** from the sale of the equity investment in PS Business Parks, Inc was the primary driver of the substantial increase in net income[18](index=18&type=chunk) Income Statement Summary (in thousands) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$1,088,131** | **$894,931** | **$3,093,621** | **$2,491,508** | | Self-storage facilities | $1,027,374 | $840,510 | $2,917,675 | $2,333,850 | | **Net Income** | **$2,778,152** | **$491,628** | **$3,951,340** | **$1,337,620** | | Diluted EPS | $15.38 | $2.52 | $21.44 | $6.70 | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Investing activities provided $1.55 billion in cash, primarily from the sale of the PS Business Parks investment Cash Flow Summary - Nine Months Ended Sep 30 (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | **$2,380,790** | **$1,814,720** | | **Net Cash from (used in) Investing Activities** | **$1,552,488** | **($3,191,079)** | | Proceeds from sale of PSB investment | $2,636,011 | $0 | | Acquisition of real estate facilities | ($529,357) | ($2,845,284) | | **Net Cash (used in) from Financing Activities** | **($3,782,889)** | **$2,077,797** | | Distributions paid | ($3,508,581) | ($1,189,876) | | **Increase in Cash and Equivalents** | **$150,389** | **$701,751** | [Condensed Notes to Consolidated Financial Statements](index=13&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the $2.7 billion sale of PS Business Parks, acquisition of 44 facilities, and a special dividend - As of September 30, 2022, the company held interests in **2,836 self-storage facilities in the U.S.** and a **35% equity interest in Shurgard**, which owns 259 facilities in Western Europe[38](index=38&type=chunk)[39](index=39&type=chunk) - On July 20, 2022, the company completed the sale of its 41% common equity interest in PS Business Parks, Inc (PSB) for **$2.7 billion in cash**, recognizing a gain of **$2.1 billion**[40](index=40&type=chunk)[52](index=52&type=chunk) - During the first nine months of 2022, the company acquired **44 self-storage facilities** for a total cost of **$501.9 million**[46](index=46&type=chunk) - A special cash dividend of **$13.15 per common share**, totaling approximately **$2.3 billion**, was paid on August 4, 2022, following the sale of the PSB investment[82](index=82&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong Same Store NOI growth, the impact of the PSB investment sale, and continued expansion [Overview](index=29&type=section&id=Overview) Q3 2022 performance was driven by strong organic growth and a $2.1 billion gain from the PSB asset sale - **Same Store Facility revenues increased by 14.7%** ($105.4 million) in Q3 2022 compared to Q3 2021, driven by strong demand, higher rental rates, and high occupancy levels[126](index=126&type=chunk) - The company completed the sale of its 41% equity interest in PS Business Parks, Inc (PSB) on July 20, 2022, receiving **$2.7 billion in cash proceeds** and recognizing a **$2.1 billion gain**[130](index=130&type=chunk) - Following the PSB sale, a special cash dividend of **$13.15 per common share**, totaling approximately **$2.3 billion**, was paid on August 4, 2022[131](index=131&type=chunk) - The company is implementing a multi-year 'Property of Tomorrow' program to rebrand and enhance facilities, with an expected spend of approximately **$220 million in 2022**[129](index=129&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Net income rose to $2.71 billion in Q3 2022, primarily due to the PSB sale gain and higher self-storage NOI - The primary drivers for the net income increase were the **$2.1 billion gain** on the sale of the PSB equity investment and a significant increase in self-storage net operating income (NOI)[133](index=133&type=chunk)[135](index=135&type=chunk) Net Income per Diluted Common Share | Period | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | **Q3** | **$15.38** | **$2.52** | **$12.86** | | **Nine Months** | **$21.44** | **$6.70** | **$14.74** | [Funds from Operations and Core Funds from Operations](index=31&type=section&id=Funds%20from%20Operations%20and%20Core%20Funds%20from%20Operations) Core FFO per diluted share grew 20.8% to $4.13 in Q3 2022, reflecting strong operational performance FFO and Core FFO per Diluted Share | Metric | Q3 2022 | Q3 2021 | % Change | 9 Months 2022 | 9 Months 2021 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **FFO per share** | **$4.66** | **$3.61** | **29.1%** | **$13.08** | **$9.69** | **35.0%** | | **Core FFO per share** | **$4.13** | **$3.42** | **20.8%** | **$11.77** | **$9.39** | **25.3%** | [Analysis of Net Income - Self-Storage Operations](index=33&type=section&id=Analysis%20of%20Net%20Income%20-%20Self-Storage%20Operations) Total self-storage NOI grew 23.8% in Q3 2022, with Same Store facilities contributing a 17.0% increase Self-Storage Net Operating Income (NOI) by Segment - Q3 2022 vs Q3 2021 (in thousands) | Segment | Q3 2022 NOI | Q3 2021 NOI | % Change | | :--- | :--- | :--- | :--- | | Same Store Facilities | $632,570 | $540,665 | 17.0% | | Acquired Facilities | $70,931 | $34,452 | 105.9% | | Newly Developed & Expanded | $50,097 | $34,731 | 44.2% | | Other Non-Same Store | $18,306 | $13,663 | 34.0% | | **Total NOI** | **$771,904** | **$623,511** | **23.8%** | [Ancillary Operations](index=50&type=section&id=Ancillary%20Operations) Ancillary NOI increased to $39.2 million in Q3 2022, led by growth in the tenant reinsurance business - Tenant reinsurance premium revenue **grew 12.1% in Q3 2022**, driven by an increased tenant base from acquired and newly developed facilities[197](index=197&type=chunk) Ancillary Operations Net Operating Income (in thousands) | Segment | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Tenant reinsurance | $35,769 | $31,745 | $112,176 | $97,156 | | Merchandise | $2,861 | $2,908 | $8,835 | $8,784 | | Third party property management | $555 | $33 | $638 | ($326) | | **Total NOI** | **$39,185** | **$34,686** | **$121,649** | **$105,614** | [Analysis of items not allocated to segments](index=51&type=section&id=Analysis%20of%20items%20not%20allocated%20to%20segments) Key unallocated items include a $100.2 million foreign currency gain and decreased equity earnings post-PSB sale - Equity in earnings from PSB ceased after July 20, 2022, due to the sale of the investment, and the company **will no longer recognize earnings from PSB** going forward[202](index=202&type=chunk)[204](index=204&type=chunk) - A **foreign currency gain of $100.2 million** was recorded in Q3 2022, primarily due to the strengthening of the U.S. Dollar against the Euro[207](index=207&type=chunk) - Interest expense increased year-over-year due to debt issued to fund 2021 acquisitions, with a weighted average interest rate of approximately **1.9%** on **$6.7 billion of notes payable**[206](index=206&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with $883.8 million in cash and a $500 million credit facility - The company holds strong credit ratings of **'A' from Standard & Poor's** and **'A2' from Moody's** for its senior notes, enabling effective access to capital markets[211](index=211&type=chunk) - Capital resources as of September 30, 2022, include **$883.8 million in cash**, a **$500 million undrawn revolving credit facility**, and an expected **$600 million in retained operating cash flow** over the next twelve months[212](index=212&type=chunk)[214](index=214&type=chunk) - Committed cash requirements include **$262.6 million for acquisitions** under contract and **$605.5 million for the current development pipeline**[215](index=215&type=chunk)[227](index=227&type=chunk) - Capital expenditures for 2022 are expected to be **$400-$450 million**, including **$220 million** for the 'Property of Tomorrow' enhancement program[220](index=220&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks relate to debt interest rates and foreign currency exposure from its European investment - Total debt outstanding was approximately **$6.7 billion** at September 30, 2022, with a weighted average effective interest rate of **1.9%**[231](index=231&type=chunk)[232](index=232&type=chunk) - The company has foreign currency exposure from its investment in Shurgard (book value **$252.6 million**) and **€1.5 billion of Euro-denominated notes**, which provide a natural hedge[233](index=233&type=chunk) [Item 4. Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2022 - The CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of the end of the period covered by the report[235](index=235&type=chunk) - **No material changes** were made to the internal control over financial reporting during the quarter ended September 30, 2022[236](index=236&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) The company believes the likelihood of a material loss from current legal proceedings is remote - The company states that the likelihood of any current legal proceedings resulting in a **material loss is remote**[238](index=238&type=chunk) [Item 1A. Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have been identified since the 2021 Annual Report on Form 10-K - **No material changes** have occurred to the risk factors disclosed in the company's 2021 Annual Report on Form 10-K[239](index=239&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No common shares were repurchased in Q3 2022, with 11.3 million shares remaining under the buyback program - **No common shares were repurchased** during the three and nine months ended September 30, 2022[230](index=230&type=chunk)[241](index=241&type=chunk) - As of September 30, 2022, **11,278,084 common shares remain available for repurchase** under the authorized program, which has no expiration date[241](index=241&type=chunk) [Item 6. Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with or incorporated by reference into the quarterly report

Public Storage (NYSE:PSA) Q2 2022 Results Conference Call August 5, 2022 12:00 PM ET Company Participants Ryan Burke - VP, IR Joe Russell - President and CEO Tom Boyle - CFO Conference Call Participants Jeff Spector - Bank of America Michael Goldsmith - UBS Ki Bin Kim - Truist Ronald Kamdem - Morgan Stanley Steve Sakwa - Evercore ISI Michael Mueller - JPMorgan Spenser Allaway - Green Street Juan Sanabria - BMO Capital Markets Keegan Carl - Berenberg Operator Ladies and gentlemen, thank you for standing by, ...

PART I FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents Public Storage's unaudited consolidated financial statements as of June 30, 2022, highlighting increased total assets and net income Key Balance Sheet Data (as of June 30, 2022) | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | $17,862,851 | $17,380,908 | | Real estate facilities, net | $15,545,495 | $15,306,996 | | **Total Liabilities** | $7,814,503 | $7,957,370 | | Notes payable | $7,340,904 | $7,475,279 | | **Total Equity** | $10,048,348 | $9,355,289 | Key Income Statement Data (Six Months Ended June 30) | Metric | 2022 (in thousands) | 2021 (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $2,005,490 | $1,596,577 | +25.6% | | **Net Income** | $1,173,188 | $845,992 | +38.7% | | Net income allocable to common shareholders | $1,067,505 | $732,059 | +45.8% | | **Diluted EPS** | $6.05 | $4.18 | +44.7% | Key Cash Flow Data (Six Months Ended June 30) | Metric | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | Net cash flows from operating activities | $1,453,773 | $1,130,455 | | Net cash flows used in investing activities | ($595,816) | ($2,719,704) | | Net cash flows (used in) from financing activities | ($577,859) | $1,812,911 | [Condensed Notes to Consolidated Financial Statements](index=13&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes disclose business activities, accounting policies, and the **$2.7 billion** sale of PSB interest post-quarter end - As of June 30, 2022, the company had interests in **2,807** self-storage facilities in the U.S., a **35%** interest in Shurgard (**256** European facilities), and a **41%** interest in PS Business Parks (PSB)[35](index=35&type=chunk)[36](index=36&type=chunk) - During the first six months of 2022, the company acquired **20** self-storage facilities for **$251.3 million**[43](index=43&type=chunk) - Subsequent to the quarter end, on July 20, 2022, the company sold its **41%** equity interest in PSB to Blackstone for **$2.7 billion** in cash, recognizing a **$2.1 billion** gain in Q3 2022, prompting a special cash dividend of **$13.15** per common share[105](index=105&type=chunk)[106](index=106&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong financial performance, Q2 2022 net income growth, and Core FFO per share increase, driven by acquisitions and rental rates - Net income for Q2 2022 was **$603.4 million** (**$3.42/share**), a significant increase from **$346.2 million** (**$1.97/share**) in Q2 2021, primarily due to a **$160.9 million** increase in self-storage net operating income and a **$114.4 million** increase in foreign currency exchange gains[121](index=121&type=chunk) Core FFO Reconciliation (Three Months Ended June 30) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | **FFO per share** | $4.58 | $2.99 | 53.2% | | **Core FFO per share** | $3.99 | $3.15 | 26.7% | - The sale of the company's equity investment in PSB on July 20, 2022, generated **$2.7 billion** in cash proceeds and a **$2.1 billion** gain to be recognized in Q3 2022, prompting a special cash dividend of **$13.15** per share[119](index=119&type=chunk)[120](index=120&type=chunk) [Analysis of Net Income - Self-Storage Operations](index=30&type=section&id=Analysis%20of%20Net%20Income%20-%20Self-Storage%20Operations) Detailed analysis of self-storage NOI by segment, showing strong growth from Same Store, Acquired, and Developed facilities Self-Storage Net Operating Income (NOI) by Segment (Three Months Ended June 30) | Segment | 2022 NOI ($ thousands) | 2021 NOI ($ thousands) | % Change | | :--- | :--- | :--- | :--- | | Same Store Facilities | 608,607 | 512,889 | 18.7% | | Acquired Facilities | 62,638 | 20,411 | 206.9% | | Newly Developed & Expanded | 46,595 | 28,914 | 61.2% | | **Total NOI** | **735,297** | **574,398** | **28.0%** | [Ancillary Operations](index=47&type=section&id=Ancillary%20Operations) Ancillary operations generated **$41.5 million** NOI in Q2 2022, primarily driven by growth in tenant reinsurance business Ancillary Operations Net Operating Income (Three Months Ended June 30) | Operation | 2022 NOI ($ thousands) | 2021 NOI ($ thousands) | | :--- | :--- | :--- | | Tenant reinsurance | 38,489 | 33,554 | | Merchandise | 3,007 | 2,806 | | Third party property management | 53 | (29) | | **Total Ancillary NOI** | **41,549** | **36,331** | [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) Strong liquidity, high credit ratings, and **$1.0 billion** cash position are bolstered by the PSB sale, supporting capital expenditures - The company holds strong credit ratings for its senior notes: **'A' from Standard & Poor's** and **'A2' from Moody's**[203](index=203&type=chunk) - Expected capital resources include **$1.0 billion cash** (as of June 30, 2022), **~$700 million** in retained operating cash flow over the next year, and **~$400 million** retained from the PSB sale after the special dividend[207](index=207&type=chunk) - Capital expenditures are expected to be approximately **$300 million** for 2022, including **$180 million** for the 'Property of Tomorrow' enhancement program and **$30 million** for LED lighting and solar panels[213](index=213&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk primarily stems from **$7.3 billion** in debt at **1.9%** interest and foreign currency exposure from Shurgard investment - Total debt outstanding was **$7.3 billion** at June 30, 2022, with a weighted average effective interest rate of **1.9%**[226](index=226&type=chunk)[227](index=227&type=chunk) - The company has foreign currency exposure from its investment in Shurgard (book value **$282.9 million**) and **€1.5 billion** of Euro-denominated debt, which acts as a natural hedge[228](index=228&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[230](index=230&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[231](index=231&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in legal proceedings but assesses the likelihood of a material loss as remote - The company states that the likelihood of any legal proceedings resulting in a material loss is remote[233](index=233&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the 2021 Annual Report on Form 10-K - No material changes have been made to the risk factors disclosed in the company's 2021 Annual Report on Form 10-K[234](index=234&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company's common share repurchase program has **11.28 million** shares remaining, with no repurchases in Q2 2022 - The company did not repurchase any common shares during the three and six months ended June 30, 2022[224](index=224&type=chunk)[236](index=236&type=chunk) - As of June 30, 2022, **11,278,084 common shares** may still be repurchased under the existing authorization[236](index=236&type=chunk)

| --- | --- | --- | --- | --- | |-------|----------------|-------------|-------|----------------| | | | | | | | | | | | | | | Public Storage | | | | | | | | | | | | | | | Public Storage | | | | | | | | | | May 3, 2021 | | | | | | | | | | | | | | | | | | | | | Important Information FORWARD-LOOKING STATEMENTS: All statements in this presentation, other than statements of historical fact, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Sec ...