Public Storage 2010 Annual Report Download - page 44

30
Other investments we have made in the past, and may make in the future include i) the development and
redevelopment of self-storage facilities in the U.S., ii) further investment in Shurgard Europe to allow it to develop
or acquire facilities, iii) further investment in PS Business Parks, and iv) the early retirement of debt or redemption
of preferred securities. There can be no assurance that these other investment alternatives will be attractive in the
long-term, or will be even be available as investment alternatives.
At December 31, 2010, we had approximately $456.2 million of cash and $102.3 million of short-term
investments in high-grade corporate securities. We also have access to our $300 million line of credit which does
not expire until March 27, 2012. Our capital commitments during the year ended December 31, 2011 of
approximately $159.9 million include (i) $133.8 million in principal payments on debt and (ii) $26.1 million for the
aforementioned acquisition of facilities and land described above. We have no further significant commitments
until 2013, when $265.6 million of existing debt comes due. On February 9, 2011, we loaned PSB $121.0 million
which PSB used to re-pay borrowings against their credit facility and repurchase preferred stock. The loan has a
six-month term, no prepayment penalties, and bears interest at a rate of three-month LIBOR plus 0.85%.
Our ability to raise additional capital by issuing our common or preferred securities is dependent upon
capital market conditions. Capital markets have improved from the severe stress in late 2008 and early 2009. In
October 2010 we issued in aggregate $125 million (face amount) of Series P Cumulative Preferred Shares at a rate
of 6.500%. In April and May 2010, we issued in aggregate $145 million (face amount) of Series O Cumulative
Preferred Shares at a rate of 6.875%. There can be no assurance that market conditions will continue to permit
preferred security issuances at amounts and at rates that we will find reasonable. We do not believe, however, that
we are dependent on raising capital to fund our operations or meet our obligations.
Results of Operations
Operating results for 2010 as compared to 2009: For the year ended December 31, 2010, net income allocable to
our common shareholders was $399.2 million or $2.35 per diluted common share, compared to $586.0 million or
$3.47 per diluted common share for the same period in 2009, representing a decrease of $186.8 million or $1.12 per
diluted common share. This decrease is primarily due to (i) a foreign currency exchange loss of $42.3 million
during the year ended December 31, 2010 compared to a $9.7 million gain during the same period in 2009, (ii) an
aggregate $35.8 million increase in income allocated to the shareholders of redeemed securities, (including our
HTXLW\VKDUHRI36%XVLQHVV3DUN¶V³36%´UHGHPSWLRQVLQDSSO\LQJ(,7)'-42 to the redemption of securities in
the year ended December 31, 2010, as compared to a $94.5 million decrease in income allocated to shareholders of
UHGHHPHGVHFXULWLHVLQFOXGLQJRXUHTXLW\VKDUHRI36%¶VUHGHPSWLRQVLQDSSO\LQJ(,7)'-42 to the redemption of
securities in the same period in 2009 and (iii) a gain on disposition of real estate assets of $30.3 million related to an
equity offering by PSB recorded in the year ended December 31, 2009.
Operating results for 2009 as compared to 2008: Net income for the year ended December 31, 2009 was
$790.5 million compared to $973.9 million for the same period in 2008, representing a decrease of $183.4 million.
This decrease is primarily due to (i) a gain of $344.7 million in the year ended December 31, 2008 related to our
disposition of an interest in Shurgard Europe, (ii) a $36.4 million reduction in net operating income with respect to
our Same Store Facilities described below, and (iii) an impairment charge included in discontinued operations with
respect to intangible assets totaling $8.2 million in the year ended December 31, 2009, partially offset by (iv) a
$49.9 million reduction in depreciation and amortization related to our domestic assets, primarily representing
reduced intangible amortization, (v) a foreign exchange gain of $9.7 million during the year ended December 31,
2009, as compared to a loss of $25.4 million during the same period in 2008, (vi) a gain on disposition of
$30.3 million recorded in the year ended December 31, 2009 related to an equity offering by PSB, and (vii) a
reduction in general and administrative expenses due to $27.9 million in incentive compensation incurred in the year
ended December 31, 2008 related to our disposition of an interest in Shurgard Europe.