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 ...

Public Storage (NYSE:PSA) Q1 2022 Results Conference Call May 4, 2022 12:00 PM ET Company Participants Ryan Burke - VP, IR Joe Russell - President and CEO Tom Boyle - SVP and CFO Conference Call Participants Jeff Spector - Bank of America Michael Goldsmith - UBS Ki Bin Kim - Truist Juan Sanabria - BMO Capital Markets Samir Khanal - Evercore Keegan Carl - Berenberg Ron Kamdem - Morgan Stanley Rob Simone - Hedgeye Risk Smedes Rose - Citigroup Todd Thomas - KeyBanc Capital Spenser Allaway - Green Street Caitli ...

PART I FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) The unaudited consolidated financial statements for Q1 2022 reflect significant year-over-year growth in revenues and net income, driven by strong self-storage operations and increased total assets [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2022, total assets increased, total liabilities slightly decreased, and total equity grew, reflecting retained earnings and preferred share issuance Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and equivalents | $940,524 | $734,599 | | Real estate facilities, net | $15,422,723 | $15,306,996 | | **Total assets** | **$17,698,781** | **$17,380,908** | | Notes payable | $7,441,723 | $7,475,279 | | **Total liabilities** | **$7,895,694** | **$7,957,370** | | **Total equity** | **$9,719,261** | **$9,355,289** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) For Q1 2022, the company reported a significant increase in total revenues and net income allocable to common shareholders, resulting in higher diluted EPS Q1 2022 vs Q1 2021 Income Statement (in thousands, except per share data) | Metric | Q1 2022 | Q1 2021 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $973,445 | $767,262 | 26.9% | | Net Income | $516,295 | $434,262 | 18.9% | | Net Income allocable to common shareholders | $464,124 | $385,810 | 20.3% | | Diluted EPS | $2.63 | $2.21 | 19.0% | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased significantly in Q1 2022, while cash was primarily used for investing activities like capital expenditures and acquisitions, and financing activities including shareholder distributions Cash Flow Summary (in thousands) | Activity | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net cash from operating activities | $656,241 | $509,162 | | Net cash used in investing activities | ($288,531) | ($403,725) | | Net cash used in financing activities | ($161,253) | ($202,971) | | **Increase (decrease) in cash** | **$206,630** | **($97,356)** | [Condensed Notes to Consolidated Financial Statements](index=11&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) The notes detail operations, accounting policies, and financial items, highlighting Q1 2022 acquisitions and the pending PSB merger expected to yield substantial cash proceeds - In Q1 2022, the company acquired **ten self-storage facilities** (781,000 net rentable sq. ft.) for a total cost of **$127.7 million**, comprising **$112.3 million** in cash and **$15.4 million** in partnership units[35](index=35&type=chunk) - On January 13, 2022, the company issued **10.0 million depositary shares** of its **4.100% Series S Preferred Shares**, raising **$250.0 million** in gross proceeds[68](index=68&type=chunk) - Subsequent to quarter-end, PS Business Parks, Inc. (PSB), in which the company holds a **41% equity interest**, entered into a merger agreement with Blackstone; if consummated, Public Storage expects to receive approximately **$2.7 billion** in cash proceeds and recognize a gain of about **$2.2 billion**[101](index=101&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong Q1 2022 performance to robust demand, higher rental rates, and occupancies, with significant NOI increases from Same Store and acquired facilities, supported by strategic initiatives and a strong financial profile [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Net income for common shareholders increased in Q1 2022, driven by higher self-storage NOI and equity share of gains, with Core FFO per share rising significantly FFO and Core FFO per Share Reconciliation | Metric | Q1 2022 | Q1 2021 | % Change | | :--- | :--- | :--- | :--- | | Diluted EPS | $2.63 | $2.21 | 19.0% | | FFO per share | $3.83 | $3.08 | 24.4% | | Core FFO per share | $3.65 | $2.82 | 29.4% | - The increase in net income was primarily due to a **$167.3 million increase** in self-storage net operating income and a **$23.6 million equity share** of gains from PS Business Parks, Inc. real estate sales[115](index=115&type=chunk) [Analysis of Self-Storage Operations](index=28&type=section&id=Analysis%20of%20Self-Storage%20Operations) Self-storage operations show strong organic growth in Same Store facilities with increased NOI and rent per square foot, alongside significant NOI contributions from recently acquired properties Same Store Facilities (2,282 facilities) Operating Highlights - Q1 2022 vs Q1 2021 | Metric | Q1 2022 | Q1 2021 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $749.3M | $647.2M | 15.8% | | Net Operating Income (NOI) | $561.3M | $465.8M | 20.5% | | Weighted Average Occupancy | 95.6% | 95.6% | 0.0% | | Realized Annual Rent per Occupied Sq. Ft. | $20.29 | $17.54 | 15.7% | - Same Store revenue growth was driven by **rate increases for existing tenants** and a **15.1% year-over-year increase in move-in rates** for new tenants due to strong demand[133](index=133&type=chunk) - NOI from Acquired Facilities increased from **$3.9 million** in Q1 2021 to **$55.3 million** in Q1 2022, primarily due to large portfolios acquired in 2021, including ezStorage and All Storage[123](index=123&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with substantial cash and credit facilities, supplemented by expected proceeds from the pending PSB merger, supporting capital expenditures and development projects - The company holds high credit ratings of **'A' from S&P** and **'A2' from Moody's** for its senior notes, ensuring effective access to capital markets[196](index=196&type=chunk) - Upon closing the PSB merger, the company expects to receive approximately **$2.7 billion** in cash and will be required to distribute an estimated **$2.3 billion** taxable gain to common shareholders[200](index=200&type=chunk)[210](index=210&type=chunk) - As of March 31, 2022, the company has development and expansion projects with a remaining cost to complete of **$496.2 million**, expected to be incurred over the next 18 to 24 months[213](index=213&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure stems from its debt, with a low weighted average interest rate, and foreign currency fluctuations related to its Shurgard investment, naturally hedged by Euro-denominated notes - At March 31, 2022, the company had approximately **$7.4 billion** in debt with a weighted average effective rate of **1.8%**[217](index=217&type=chunk)[218](index=218&type=chunk) - Foreign currency exposure from the investment in Shurgard (book value **$313.3 million**, fair value **$2.0 billion**) is naturally hedged by **€1.5 billion** (**$1.7 billion**) of Euro-denominated debt[219](index=219&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** at a reasonable assurance level as of the end of the period[221](index=221&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, these controls[222](index=222&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company is party to various legal proceedings and claims, but management believes the likelihood of these resulting in a material loss is remote - The company states that the likelihood of any current legal proceedings resulting in a **material loss**, either individually or in aggregate, is **remote**[223](index=223&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021 - No **material changes** to the risk factors disclosed in the 2021 Form 10-K were reported[224](index=224&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any common shares during the quarter, with a significant number of shares remaining available under the existing repurchase program, though no current plans exist - The Board has authorized a repurchase program for up to **35,000,000 common shares**; as of March 31, 2022, **11,278,084 shares** remain available for repurchase under this program[226](index=226&type=chunk) - No common shares were repurchased during the three months ended March 31, 2022[216](index=216&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with or incorporated by reference into the Form 10-Q, including certifications and XBRL data files