Public Storage 2007 Annual Report Download - page 4

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ur progress in 2007 was substantial as we realized many of the benefits from
the 2006 Shurgard acquisition and continued to grow our business. Net
income per share increased from $0.33 to $1.17 and funds from operations (FFO) 1
per share increased from $3.57 to $4.97. Most important, our intrinsic 2or
franchise value per share improved substantially. We measure our progress per
share, since changes in absolute size mean little unless translated into additional
value per share. Our growth this year was achieved even though we reduced our
financial leverage. Equally as important, we are very well positioned going into
2008 to take advantage of opportunities that may come our way from the turbulent
credit markets.
Businesses
Our principal business is owning and operating self-storage or mini-warehouse
properties, both in the United States (U.S.) and seven Western European countries.
Self-storage properties primarily serve consumers, offering month-to-month storage
units ranging in size from 2'x 2' to 30'x 30'. In the U.S., our properties are operated
under the “Public Storage” name and in Europe, under the “Shurgard” brand. We own
126 million net rentable square feet in the U.S. and about 9 million net rentable square
feet in Europe.
We also have meaningful investments in commercial properties, primarily business parks,
which consist mostly of “flex” space, or a combination of office and industrial space.
These properties are operated under the “PS Business Parks” name. Through our equity
investment in PS Business Parks, a separately listed public company (AMEX:PSB), and
our direct ownership of properties, we have interests in approximately 21 million rentable
square feet, concentrated primarily in eight states.
TO OUR SHAREHOLDERS
O
1. See accompanying schedule “Computation of Funds from Operations” for a definition.
2. See Public Storage, Inc. 2006 Annual Report letter to shareholders for a discussion of “intrinsic value.”