Public Storage 2010 Annual Report Download - page 64

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a gain of $9,662,000, and a loss of $25,362,000 in 2010, 2009, and 2008, respectively, representing the change in
the U.S. Dollar equivalent of the loan due to changes in exchange rates from the beginning to the end of each
respective period. The U.S. Dollar exchange rate relative to the Euro was approximately 1.325, 1.433, and 1.409 at
December 31, 2010, 2009 and 2008, respectively.
Future foreign exchange gains or losses will be dependent primarily upon the movement of the Euro
relative to the U.S. Dollar, the amount owed from Shurgard Europe and our continued expectation with respect to
repaying the loan.
Discontinued Operations: Discontinued operations includes the historical operations of our containerized
storage and truck operations that were discontinued in 2009 and the operations of certain self-storage facilities that
were discontinued. In addition to the pre-disposal ongoing revenues and expenses of these operations, discontinued
operations includes the following items: (i) gains on disposition of discontinued self-storage facilities totaling
approximately $7,794,000 for 2010, compared to gains of $6,018,000 for 2009, (ii) $3,500,000 in costs associated
with the disposal of trucks recorded in 2009, and (iii) impairment charges associated with terminated ground leases
totaling $595,000 for 2010, compared to charges of $8,205,000 recorded for 2009.
Liquidity and Capital Resources
We have $456.2 million of cash and $102.3 million in short-term investments in high-grade corporate
securities at December 31, 2010. We believe that our cash, the cash that we expect to receive upon maturity of the
marketable securities, and the internally generated net cash provided by our operating activities will continue to be
sufficient to enable us to meet our operating expenses, debt service requirements, capital improvements and
distribution requirements to our shareholders for the foreseeable future.
Operating as a REIT, our ability to retain cash flow for reinvestment is restricted. In order for us to
maintain our REIT status, a substantial portion of our operating cash flow must be distributed to our shareholders
(see ³5HTXLUHPHQW WR 3D\ 'LVWULEXWLRQV´ below). However, despite the significant distribution requirements, we
have been able to retain a significant amount of our operating cash flow. The following table summarizes our ability
to fund capital improvements to maintain our facilities, distributions to the noncontrolling interests, capital
improvements to maintain our facilities, and distributions to our shareholders through the use of cash provided by
operating activities. The remaining cash flow generated is available to make both scheduled and optional principal
payments on debt and for reinvestment.
For the Year Ended December 31,
2010 2009 2008
(Amount in thousands)
Net cash provided by operating activities (a) ...................................................... $ 1,093,221 $ 1,112,857 $ 1,076,971
Capital improvements to maintain our facilities ................................................. (77,500) (62,352) (76,311)
Remaining operating cash flow available for distributions to equity holders ..... 1,015,721 1,050,505 1,000,660
Distributions paid to noncontrolling interests ..................................................... (24,542) (28,267) (39,328)
Cash from operations allocable to Public Storage shareholders ......................... 991,179 1,022,238 961,332
Distributions paid to Public Storage shareholders .............................................. (754,770) (624,665) (733,676)
Cash from operations available for principal payments on debt and
reinvestment (b) .............................................................................................. $ 236,409 $ 397,573 $ 227,656
(a) Represents net cash provided by operating activities for each respective year as presented in our December 31, 2010
consolidated statements of cash flows.
(b) We present cash from operations for principal payments on debt and reinvestment because we believe it is an important
measure to evaluate our ongoing liquidity. This measure is not a substitute for cash flows from operations or net cash flows
in evaluating our liquidity, ability to repay our debt, or to meet our distribution requirements.